August 29, 2022

State Street site could be primed for high-rise development

A broker is seeking buyers for the building between Adams Street and Jackson Boulevard, which has been vacant since Foot Locker closed its store there in 2020.

A big, empty building on State Street in the Loop is hitting the market again, a property that could attract interest from developers that want to tear it down and build a high-rise in its place. The Sterling Organization, the owner of the 112,000-square-foot building at 209-227 S. State St., has hired Chicago brokerage Greenstone Partners to sell the property, the home of a Woolworth’s store for many years. The building has been vacant since Foot Locker closed its store there in 2020.

Not surprisingly, Greenstone plans to market the property as a redevelopment candidate, accentuating its size and generous zoning that could accommodate a tall building on the site. A new apartment building would be the most obvious option for the property, given the strength of the downtown multifamily market. “There are so many different ways you can cut it from a development standpoint,” said Greenstone CEO and Managing Partner Danny Spitz. “It’s very rare to find something like this on State Street.” Demolishing or repurposing the existing building to create something new also makes sense given State Street’s current retail struggles. The vacancy rate for the central Loop, which includes the State Street shopping district, was 23.4% at the end of 2021, up from 14.7% two years earlier, according to Stone Real Estate, a Chicago brokerage. Greenstone is marketing the property for sale without an asking price. Sterling, a Palm Beach, Fla.-based real estate investor, paid $14.5 million for the building in three transactions in 2018 and 2019, according to Cook County property records. County records suggest Sterling could face some financial pressure to sell the building. Sterling is carrying an $18.3 million mortgage on the property that was set to mature on May 1, but the firm negotiated an agreement with its lender extending the payoff date to May 1 of 2023, according to a document filed with the county.