Should The GGP HQ Be Bulldozed?
The land beneath the 226k SF General Growth Properties HQ, 110 N Wacker Dr, was sold to Howard Hughes Corp for $12.3M last week (it owns the building), meaning we could be one step closer to a new Loop high-rise. STREAM Capital Partners principals Jordan Shtulman and Jonathan Wolfe (above) repped an LA-based family office that lost the deal (despite their offer at a sizzling .03% cap rate) when Howard Hughes exercised its right of first refusal on the ground. Jordan says Howard Hughes jumped at the chance for total control (plus continued $6.1M/year in GGP rent), because it ultimately needs the property in fee simple in order to control any future redevelopment.
If it wasn’t encumbered by the long-term, low-rent ground lease, the land could be worth $40M, Jordan tells us. GGP seems unlikely to stay long since it’s only in half the building (above), plus Howard Hughes has the right to terminate its lease with six month’s notice in 2019. And Howard Hughes will likely aim higher, even building close to 1M SF of office space on the site. "With all of the new development in the West Loop, proximity to the Metra, and the size of the site, it would be a big surprise if Howard Hughes doesn't construct a gleaming office tower to complement its neighbors," Jonathan says. Should the GGP HQ, a (very) understated Chicago icon (or eyesore) be razed? Tell marissa.oberlander@bisnow.com your thoughts!
