F
RI Investors is poised to enter Chicago's office market with a significant acquisition. The Florida-based company, led by CEO Michael McCloskey, is close to purchasing 70 West Madison Street, a 57-story Loop tower, for approximately $100 million or $70 per square foot. This sale would represent a substantial discount from the building's 2014 price of $375 million, a 73% markdown.

    The property, which was 90% leased in 2014 but now stands at 68%, is being sold by a joint venture of Hearn, GEM Realty Capital, and Farallon Capital Management. CBRE's Blake Johnson and David Knapp are handling the sale. The building's largest tenant is CIBC, occupying over 116,000 square feet.

    Financing issues could still jeopardize the deal, but if it closes, it would likely resolve Bank of America's $276 million foreclosure lawsuit against the landlords. This transaction highlights the challenges facing downtown office landlords in Chicago, where plummeting property values and foreclosures have become common due to remote work and rising interest rates.

    Despite these difficulties, FRI's potential acquisition demonstrates investor interest in downtown Chicago's recovery, particularly as companies like Google and JPMorgan Chase commit to significant office space investments. The building's low price could allow FRI to invest in updates and tenant improvements, a strategy the company typically employs in mid-sized markets across the southeastern US.