One of Chicago’s most distinctive landmarks — the Tribune Tower, built in 1925 — is about to change hands. Tribune Media has accepted an offer potentially worth $240 million from Los Angeles-based CIM Group, which is expected to use the 35-story building as the centerpiece of a Michigan Avenue hotel, residential and retail development.
“Tribune Tower has been a unique part of Chicago’s skyline since the 1920s,” Tribune Media CEO Peter Liguori says. “It is a gem of architectural and structural accomplishment and a constant reminder of the important role that Tribune has played in the development of the city itself.”
The company began its search for a buyer in October. It will receive $205 million at the closing and could collect an additional $35 million if it fulfills what it describes as “certain conditions.” They expect the deal to close by the end of September.
This sale was “a strategic priority for the company,” Liguori says. He noted that the terms are “consistent with the $1 billion valuation of our [real estate] portfolio.”
The sale will include 740,000 square feet in the tower, as well as a 36,000-square-foot development site on Cityfront Plaza.
This is the latest of several real estate deals Tribune has made as it struggles to round up cash — and potentially a buyer. In February it hired two financial advisers, Moelis & Co and Guggenheim Securities, to “explore the full range of strategic and financial alternatives to enhance shareholder value.”
In 2016 it has collected $89 million from sales of properties in markets including South Florida and Seattle. It expects to soon close agreements to sell the north block of the Los Angeles Times Square property and the nearby Olympic printing plant.
CIM Group Principal Avi Shemesh says that over the last decade “we have recently made several compelling investments that have expanded our growing presence in the city. Tribune Tower is a prominent property with a rich history that has been a feature of the Chicago skyline for nearly a century. It’s in an area that, today, is attracting new businesses and residents.”