A troubled, albeit iconic, Chicago office building is officially changing hands at nearly 87 percent the value of its previous purchase price. 

A joint venture between 601W Companies and David Werner Real Estate Investments have secured $58.5 million in acquisition debt to finance their purchase and lease-up of 175 West Jackson Boulevard, a 22-story, 1.4 million-square-foot office building in Downtown Chicago, according to a release.  

601W and David Werner purchased the building from a debt syndicate led by Brookfield on Jan. 30 for $41 million, an 86.6 percent discount to the $306 million purchase price Brookfield paid Extell for it in 2018.

Northwind Group provided the acquisition financing — structured as a $33.5 million initial advance at closing with $25 million placed in reserve for future leasing costs. No broker was listed on the transaction.

Ran Eliasaf, founder and managing partner of Northwind Group, noted in a statement that the Chicago office market has seen an increase in leasing activity and institutional capital investment over the last year, and that the purchase price provided an attractive entry point to lend on. 

He also pointed to the $24 million in capital improvements made by Brookfield during their tenure. 

“We believe this combination, coupled with the property’s strong location and flexible large floor plates, positions the asset well for successful business plan execution,” added Eliasaf.   

That said, Brookfield’s stewardship at 175 West Jackson Boulevard was anything but smooth. 

Its lender had previously filed a lawsuit in 2022 to foreclose on a $280 million commercial mortgage-backed securities loan made for the building, according to Bloomberg. 

While the building served as home to several financial firms and to the Chicago branch of the U.S. Securities and Exchange Commission, it was only 62 percent occupied in November 2021, per Bloomberg.  

Located on a full city block at the intersection of Jackson Boulevard and Van Buren Street in the heart of the Chicago Loop, 175 West Jackson Boulevard opened in 1912 and was designed in the Beaux Arts style by Daniel H. Burnham, an eminent prewar Chicago architect whose portfolio includes such downtown staples as The Rookery, the Marshall Field Building, the Field Museum and Union Station. 

Today, 175 West Jackson sits near Chicago’s main commuter hub and rail yard, Ogilvie Transportation Center, which was completed in 1987.  

The purchase of 175 West Jackson Boulevard also adds to the Chicago portfolio of David Werner Investments. The firm also owns Aon Center, an 83-story office tower off Lake Michigan, and the Old Post Office, an Art Deco historical landmark that has been repurposed as a multipurpose events complex. 

“This acquisition continues our thesis of high-quality assets in strong locations at a reset basis,” David Werner said in a statement. 

Brookfield did not respond to requests for comment. 

Brian Pascus can be reached at bpascus@commercialobserver.com.