Chicago powerhouse developer Mike Reschke has been selected as the buyer of a landmark Wacker Drive office tower that’s plagued with financial troubles amid a beleaguered commercial real estate market.
Reschke, CEO of Chicago-based Prime Group, is poised to acquire the 40-story Jewelers Building at 35 East Wacker, with potential plans to convert at least part of the 556,200-square-foot property into a hotel, CoStar reported.
While the exact sale price remains undisclosed, people familiar with the deal suspect a figure surpassing $39 million, exceeding $70 per square foot, the outlet reported. The sale has not been finalized, and it’s possible that it falls through completely, as such occurrences have become increasingly common due to rising interest rates and other economic concerns.
Newmark brokers are marketing the building on behalf of John Hancock Life Insurance, the lender that filed a $65 million foreclosure lawsuit against Canadian landlord the Dorchester Corp., after it failed to fully pay $2.3 million due in property taxes and other charges by July 1. Nearly two months later, after the property went into receivership, John Hancock listed it for sale.
If the deal gets finalized, it would be the first the Jewelers Building has changed hands since 1981, when Dorchester bought the beaux-arts style tower.
Reschke’s potential hotel conversion is no surprise, given the developer’s knack for redeveloping old office properties and prowess in the lodging industry. Prime Group turned vintage office space in the building at 208 South LaSalle Street into two hotels — the JW Marriott and, on its upper floors, The LaSalle. Reschke’s firm is also making strides with its development of the 390-room RIU Hotels & Resorts tower at 148-158 East Ontario Street.
Built in the 1920s, the Jewelers Building possesses a rich history. Infamous gangster Al Capone was rumored to have run a speakeasy at the site during the prohibition era, though historians have debated the veracity of such stories. The building’s name spawned from its unusual indoor parking and elevator system designed to protect jewelers from robbery while transporting highly valuable goods.
— Quinn Donoghue