Michael Marks

Mar 17, 2023

100 S. State St. A five-story building on State Street in the Loop has hit the market, and the broker selling it has one suggestion for investors wondering what they could do with property: tear it down. New York-based Tishman Realty has hired Cushman & Wakefield to sell the 69,000-square-foot building at 100 S. State St., the home of a Capital One Café, Champs Sports and an Expansive co-working space. Amid high retail vacancies on State Street, it’s not easy to get investors excited about buying property on the shopping strip these days. But the building could attract interest from developers with plans to demolish it and build a high-rise in its place, said Michael Marks, a Cushman executive director. Current zoning for the property would allow for a roughly 245,000-square-foot tower there. Marks is pitching the offering as a “covered-land play,” a property that’s generating rental income but could be worth more as a development site. An investor could buy it, collect rent for a while, and then tear it down and build something new when the time is right. “At some down the road, you own a 15,000-square-foot-plus site at the corner of State and Monroe that has the most liberal as-of-right zoning available to re-imagine or go vertical,” Marks said. The building was a major fixer-upper when Tishman and a partner bought it from Amalgamated Bank in 2015 for $35 million. Amalgamated moved out, leaving Tishman with an empty box. It leased the office space on the building’s top three floors to WeWork and leased all the retail space to Champs and Capital One. CoStar 100 S. State St. WeWork moved out, but another co-working company, Expansive, took over about a third of its space. The building is 58% occupied, according to Cushman. On a weighted-average basis, the tenants have more than nine years left on their leases, guaranteeing a new owner a stream of income for a while, Marks said. Capital One recently renewed its lease for another 10 years, he said. An investor could boost the value of the property by leasing up its vacant office space, but finding office tenants is a tall order in the current market. Demand for Loop office space is especially weak as businesses settle into the post-pandemic hybrid work era. Though Marks likes the property’s development potential, he sees multiple outcomes from the sale process. “This thing has a little bit of everything baked into it, so I think it’s going to appeal to a variety of groups,” Marks said. He declined to say how much he expected the building would fetch. A Tishman representative did not return a phone call. In 2019, the Tishman venture refinanced the property with a $37 million mortgage, retiring a $30 million loan it took out when it acquired the property in 2015, Cook County records show. It’s probable the venture pulled some money out of the building through the transaction. High-rise developers scouting the Loop for sites have at least one other option on State Street. The owner of the former Woolworth's building at 209-227 S. State put the vacant property up for sale last August. It's still on the market. Juice: Your daily jolt of news on power and politics. Email Address