CHICAGO — A Chicago-based investment company has purchased the retail portion of the iconic Tribune Tower, signaling renewed confidence in the revival of the Magnificent Mile shopping district.
North American Real Estate (NARE) has acquired the 47,000-square-foot ground-floor retail space of the Tribune Tower at 435 N. Michigan Ave., making it the first time the retail section has been sold separately since the tower’s completion in 1925.
“This is a very prominent building in the city and we’re extremely excited,” said Savas Er, principal at North American Real Estate.
Retail Sector Looks to Bounce Back Along Michigan Avenue
The deal, which closed on Thursday, reflects NARE’s bet on growing foot traffic and tenant interest returning to Michigan Avenue. The space — currently only 36% leased — includes tenants like the Museum of Ice Cream, Blue Bottle Coffee, and A. Lange & Söhne, a luxury watch shop.
Much of the property faces the high-traffic Pioneer Court plaza, near the Apple flagship store and the Chicago River. Er told CoStar News he sees opportunity in adding a mix of smaller food and beverage tenants along the pedestrian side and larger anchor tenants along Michigan Avenue.
“The foot traffic on Pioneer Court, with Apple and the Museum of Ice Cream, is desirable to tenants,” Er said.
NARE’s Ongoing Interest in Chicago Retail Properties
NARE has previously acquired other notable properties, including the Flat Iron Arts Building in Wicker Park and the Point at Clark shopping center in Lakeview. Last year, it also purchased a retail and office building at 605 N. Michigan Ave. for $47 million — a major discount compared to the $140 million it fetched in 2016.
The Tribune Tower retail deal continues that trend, giving NARE a foothold in one of the city’s most historically significant buildings, which was designed after a global competition for “the most beautiful office building in the world.”
Tribune Tower’s Historic and Cultural Significance
Originally the headquarters of the Chicago Tribune, the 36-story neo-Gothic landmark features limestone façades embedded with historic fragments from the Great Wall of China, the Berlin Wall, and the Taj Mahal. The newspaper vacated the building in 2018, and most of the tower has since been converted into residential condominiums — which were not part of the NARE purchase.
Savas Er said the international recognition of the building factored heavily into the acquisition. During a trip to Tokyo in April, he noticed a sign promoting Chicago tourism featuring a photo of the Tribune Tower. “I thought, this is a sign,” he remarked.
Retail Struggles Remain, But Signs of Life Emerge
Despite recent closures and high vacancies on the Magnificent Mile, there are glimmers of hope. A Harry Potter-themed store recently opened, and Spanish retailer Mango signed a major lease. Meanwhile, Water Tower Place is downsizing from a vertical mall into a three-story retail center.
The Tribune Tower retail property was marketed by Eastdil Secured brokers Michael Pagliari, David Caprile, and Sam Byczek, on behalf of previous owners CIM Group and Golub & Co., who paid $240 million for the tower in 2016.
Do you think Michigan Avenue is on its way back — or are Chicago’s retail landmarks still struggling to recover? Share your views at ChicagoSuburbanFamily.com.
