10/11/2015

InterestinTribuneTowerlikelytobehighChicagoTribune

Business

InterestinTribuneTowerlikelytobe
high
RobertChannick ContactReporter
ChicagoTribune

SHARETHIS

TribuneTowersitecouldfetchmorethan$100million,developerssay

OCTOBER9,2015,7:33PM

iththeannouncementThursdaythatTribuneMediaislookingtosellitshistoricTribune
Tower,speculationisbuildingoverwhomightbuyitandwhatelsemightspringupat

thegatewaytoNorthMichiganAvenue.
InterestinacquiringtheprominentsitealongChicago'sstoriedshoppingdistrictisexpectedtobe
high,asisthepotentialsalesprice,whichmaytop$100million,developerssay.Atthatprice,its
bestusewilllikelybefardifferentfromtheoneitwasbuiltfor90yearsago.
Whilethelandmarkedtoweritselfwillremainpartofamultiuseredevelopment,itstenants,
includingtheChicagoTribune,mayhavetofindanewhome.
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"Retailandresidentialareverycompellingusesbecausethosearearguablythemostvaluable,
giventhatlocation,"saidJohnRutledge,presidentandCEOofChicagobaseddeveloperOxford
Capital."Buthoteland/orofficemayhavemerit,too."
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Oxfordhasalreadystartedasimilarprojectjustacrosstheriverat360N.MichiganAve.,where
thelandmarkedLondonGuarantee&AccidentBuildingandanadjacentparcelarebeing
redevelopedintotheupscaleLondonHousehotelabovetwostoriesofretail.Builtonthesiteof
historicFortDearborn,the22storyformerofficebuildingwasdesignedbyChicagoarchitect
AlfredAlschulerandopenedin1923.
Thelastofficetenantsmovedoutandthebuildingwasrepurposedtomakewayforthehotel,
whichissettoopennextyear.RutledgesaidTribuneTowermightalsodisperseitsofficetenants
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tomakethebestuseofitsMichiganAvenuerealestate.
RutledgesaidOxfordisinterestedinacquiringthepropertyforredevelopment.
"It'sthekindofprojectthatwelike,thescaleofit,thecomplexityofit,themultidimensionalityof
it,andithappenstoberightupouralley,"Rutledgesaid.
TribuneMediahashiredrealestateinvestmentbankerEastdilSecuredtoexploreanoutrightsale
orapartnershiptoredeveloptheneoGothictower,whichsitsonthreeacres.Completedin1925
astheheadquartersfortheChicagoTribune,thebuildinghas737,000squarefeetofspace,butis
zonedforupto2.4millionsquarefeet.
TribuneMediaspunoffitspublishingdivisionincludingtheChicagoTribune,LosAngeles
TimesandotherdailynewspapersinAugust2014,retainingthebroadcastingbusinessandreal
estateportfolio.
TribuneRealEstateunveiledconceptualplanslastyeartoredeveloptheparcel,addingseveral
buildingstomaximizethespacewithresidential,retailandhotelcomponents.
ChicagodeveloperJohnMurphy,CEOandchairmanofMurphyCapitalManagement,saidthere
willbegreatinterestinthesite,andplanstotakealookatithimself.Hesaidthebuildingand
adjacentland,mostofwhichisnowasurfaceparkinglot,couldsellformorethan$100million.
Thecosttocompletesuchanambitiousprojectwillbemuchhigher,Murphysaid.
"It'smorelikelyalocaldeveloperplaythatmayhavejointventureswithalargeinstitutional
capitalsourcebecauseit'sgoingtorequireasignificantamountofequitytogetthedealdone,"he
said.
Murphyhasredevelopednearbyhistoricproperties,convertinga22storyartdecoofficebuilding
at100W.MonroeSt.,builtin1927,intoaHyattCentrichotel.Healsoturnedthelongempty
ChicagoMotorClubbuildingat68E.WackerPlace,builtin1928,intoaHamptonInn.Both
hotelsopenedthisyear.
TheTribunesite"begsforamultiuseproject,"accordingtoMurphy,withafairlysignificantretail
componentatthebase.Healsothinksaresidentialcomponentislikely.
"Youmightgetanothercombinationofbothapartmentandcondominium,comparabletowhat
youseeinStreeterville,wherethere'salotofthesecombinationtowersstartingtopopup,"
Murphysaid.
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JustwestofTribuneTowerisamuchmoremoderntowerwiththename'Trump'emblazonedon
itincontroversiallylargeletters.Completedin2009,thegleaming96storyhoteland
condominiumdevelopmentwasbuiltonthesiteoftheformerChicagoSunTimesbuilding,afar
fromhistoricstructurethatwasunceremoniouslydemolished.
MurphysaidtheTribunesitehasthepotentialtoeclipseTrump'sdevelopment.
"TheadvantagethatthesiteoftheTribunehasisthefactthatit'strulyMichiganAvenueretail,"
Murphysaid."TrumpTowerdoesn'thavethesameaccessthatTribunehas.Soarguably,froma
purefundamentalrealestateperspective,itisasuperiorsitewhenitcomestomixeduse."
rchannick@tribpub.com
Twitter@RobertChannick

Copyright2015,ChicagoTribune
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