Chicago Office Tower Sells at 87% Discount to Pre-Covid Value

Introduction: a Landmark Commercial Property Sale

In early February 2026, a significant transaction on the Chicago commercial real estate market drew widespread attention. A 22-storey office tower at 175 W Jackson Blvd, totaling roughly 1.4 million square feet, was acquired by a joint venture for about $41 million, reflecting a dramatic 87% reduction from the roughly $306 million price tag paid by its previous owner in 2018.

What Happened: Transaction Details

The seller, Brookfield Asset Management, had held the property since 2018 but faced mounting challenges in recent years due to changing demand dynamics, rising vacancy rates, and broader economic shifts affecting office occupancy. The new buyers, a partnership between 601W Companies and David Werner Real Estate Investments, secured the asset at a deeply discounted basis as commercial office values in downtown Chicago underwent recalibration.

Why Office Values Dropped Sharply

The steep discount underscores persistent weakness in the office segment, particularly in major urban cores where remote and hybrid work models have reduced demand for traditional office space. The vacancy rate in the property reportedly exceeded 50%, and lenders had initiated foreclosure proceedings on the underlying $280 million loan, contributing to the downward pressure on pricing.

Market Analysis: Implications for Chicago

Chicago’s office market, one of the largest in the United States, reflects broader structural changes reshaping commercial real estate. Investors are increasingly cautious, seeking opportunities in repositioned assets while adapting to evolving workspace needs. Deals at significant discounts may signal a new valuation paradigm in the sector as stakeholders navigate long-term occupancy trends and financing realities.

Outlook from Industry Analysts

While the recovery of national office markets has been uneven, the Chicago example highlights both the challenges and strategic investment opportunities that arise from substantial price resets. Firms with capital and leasing expertise may benefit from repositioning these assets for future demand.

As reported by experts International Investment, this sale exemplifies a pivotal shift in Chicago’s commercial property landscape, illustrating how investors are strategically realigning portfolios in response to structural market trends and long-term prospects for urban office demand.

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