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Old Posted Oct 18, 2019, 5:28 PM
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Post office owners just bought more property close by.

October 17, 2019 11:50 AM

Old Post Office developer eyes another big turnaround project

601W is upping its bet on the southwest Loop's renaissance with a deal to buy a sprawling Canal Street office building slated to be empty in a year.

As it prepares to welcome tenants to the Old Post Office after an $800 million-plus overhaul, developer 601W has lined up another big project just a block away.

The New York-based firm is under contract to pay around $67 million for the 575,000-square-foot office building at 801 S. Canal St., according to sources familiar with the deal.

The pending sale at roughly $115 per square foot tees up another bold bet on the southwest Loop for 601W, which set off a renaissance along the South Branch of the Chicago River by turning the mammoth Old Post Office into a modern office building and inking leases there with a slew of prominent tenants.

The sprawling building it is now poised to buy stretches almost a full city block along Canal Street between Polk and Taylor streets. It will soon be empty and in need of a face-lift. Chicago-based Northern Trust has leased the six-story property since the owners, a group now led by real estate investor Paul Gearen, developed it for the bank in 1990. But Northern Trust is moving out in October 2020 after its current lease expires, part of a consolidation of some of its downtown offices into space at 333 S. Wabash Ave.

That gives 601W a little less than a year's worth of rent to tide it over and decide what it wants to do with the building and the surface parking lot along its south end, which could also be developed, according to a marketing flyer for the property.

The building will serve as a bellwether for how hot the southwest Loop can get as tenants file into the Post Office and capital pours into a pocket of downtown that has labored to establish itself as a corporate destination.

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