Sterling Bay has been on an acquisition streak of Class A office buildings in Chicago lately, including recent purchases of 600 W. Chicago and Prudential Plaza. Now the Chicago-based developer is pulling the trigger on 875 North Michigan Avenue, formerly known as the John Hancock Center. The building’s current operator and co-owner, Hearn, will reportedly sell their stake in the property for more than $300 million.
Along with an unnamed partner, Sterling Bay will buy Hearn’s interest in the iconic building, which includes offices on the 13th through 41st floors and nine stories of parking, according to a report in Crains. The deal will also allow Sterling Bay to shop around the naming rights to the tower. Though known colloquially as the John Hancock Center, the Boston-based insurer exited the building years ago.
Hearn acquired the 897,000-square-foot office and 717-car garage component of the building in 2013 for $140 million, with other owners controlling the condo, retail and observation deck spaces. Built in 1970 by Skidmore, Owings & Merrill, the 100-story building is one of the city’s most recognizable landmarks, with its tapered design and the expressed engineering of its cross-braces. Hearn has made close to $69 million in capital improvements to the building.
In the last year, Sterling Bay bought 600 West Chicago Avenue—home to the Groupon headquarters—from Equity Commonwealth for $510 million as well as the two-tower Prudential Plaza from 601W Companies for $680 million. They have been involved with marquee developments in the West Loop, including Google’s Midwest headquarters and McDonald’s recent corporate relocation. Lincoln Yards, their most ambitious project, will occupy 70 acres along the North Branch of the Chicago River.