Sterling Bay scoops up former Montgomery Ward warehouse for $510M

Long associated with repositioning old structures into new office space, Chicago developer Sterling Bay is getting into the habit of picking up large, fully-leased buildings with its acquisition of 600 W. Chicago Avenue.

Designed in 1908 by architects Schmidt, Garden, and Martin as the world’s largest reinforced concrete building, the former Montgomery Ward warehouse comes nearly fully leased with tenants including Groupon, Echo Global Logistics, Uptake Technologies, Jump Trading, Big Ten Network, and Lightbank.

Although Sterling Bay wasn’t behind the structure’s initial adaptive reuse, the company still plans to add value to the 1.65-million-square-foot complex. Proposed upgrades include updates to the building’s common areas and roof deck, new retail spaces, and an improved riverwalk experience.

At $510 million, the transaction represents Sterling Bay’s biggest deal to date. However, the company is expected to soon follow up with an even pricier two-building acquisition of Prudential Plaza for an estimated $680 million.

Despite its recent foray into more established properties closer to Chicago’s Central Business District, the busy developer is still extremely active in emerging and once industrial areas of the city.

Sterling Bay is currently putting the finishing touches on McDonald’s new corporate HQ in the West Loop and recently received preliminary zoning approval to build a pair of office buildings at the former site of Coyne College in the Fulton Market District.

Further north, the company plans a massive mixed-use complex along the Chicago River at the border of Lincoln Park and Bucktown. Known as Lincoln Yards, the site is one of ten locations hoping to land Amazon’s coveted HQ2 campus.

• Sterling Bay Is in Advanced Talks to Buy Groupon Building in Chicago [Wall Street Journal]