Tribune Media Completes $430M Portfolio Sale
- Sep 30, 2016
Chicago—CIM Group and Golub & Co. are planning a mixed-use development in Chicago now that they have acquired the 35-story, 740,000-square-foot Tribune Tower and a 36,000-square-foot site located to the east of the landmark tower from Tribune Media Co. for about $240 million.
The disposition of the new-Gothic Tribune Tower on Chicago’s Magnificent Mile is one of three marquee properties the media company made this week, receiving a total of $430 million in gross cash proceeds. Tribune Media said it could also receive contingent payments of up to an additional $45 million, bringing the total to $475 million.
Since the beginning of the year, Tribune Media has sold several smaller properties around the United States. It announced the pending sale of the Tribune Tower in late August and of two Los Angeles properties—the north block of the Los Angeles Times Square site and the nearby Olympic printing plant—earlier in the year. Tribune Media hired Eastdil Secured nearly a year ago to explore the sale or a partnership to redevelop the iconic Tribune Tower, a Chicago landmark built in 1925. Two years ago, Tribune Media spun off its publishing division, which included the Chicago Tribune, Los Angeles Times and other newspapers and is now known as Tronc. Tribune Media kept the broadcasting business and real estate portfolio, but has been considering sales of both the real estate and several media assets to shore up shareholder value.
“We have made considerable progress toward achieving our goal of realizing at least $1 billion of gross proceeds from the sale of some of our most significant real estate holdings,” Peter Liguori, Tribune Media president & CEO, said in a prepared statement. “Real estate sales closed from 2014 through today’s announcement have generated $576 million of gross cash proceeds. Importantly, we estimate the value of our remaining real estate portfolio to be at least $500 million, including properties in Chicago, Southern California, Fort Lauderdale and Long Island.”
So far this year, Tribune Media has sold nine properties for $519 million of gross cash net proceeds or approximately $409 million of net cash proceeds, the company stated.
The Los Angeles Times reported Omni Group, a Canadian-based real estate investment and development firm, bought the Los Angeles Times Square North Block for more than $100 million. The Times building is one of five interconnected structures on the site that is also known as Times Mirror Square. While formal plans haven’t been announced, the newspaper said Omni is considering a mixed-use redevelopment that could include apartments. The Times also reported Los Angeles-based Harridge Development Group has purchased the printing plant but did not release details about its plans.
In Chicago, CIM Group and Golub said they are planning to retain the historic integrity of the Tribune Tower while also undertaking a repositioning of the property.
“Tribune Tower is not only a Chicago icon, it also carries enormous potential as a well-located real estate investment,” Michael Newman, president & CEO of Golub & Co., said in prepared remarks. “In our decades of ownership along the Magnificent Mile, this is one of the most historically important opportunities we’ve seen. We’re happy to be a part of a team that will bring this important piece of Chicago’s history into the 21st Century using a thoughtful and creative approach to the property and the adjoining site.”
The property, which includes Tribune Tower and a surface parking lot, is currently zoned for a mix of uses that includes office, hotel, residential and retail. CIM said it is exploring various options that are appropriate for the neighborhood and will work with city officials and the community to create a plan.
“We take our responsibility as stewards of this landmark building very seriously, and will develop a plan for the property that respects the history of the tower and maintains its prominence as a part of the overall project,” said Avi Shemesh, co-founder & principal at CIM Group.