For half a decade, locals and industry insiders have been watching the formerly mighty Tribune media empire crack, collapse, and dissolve away like the Antarctic ice shelf. Today a massive glacier calved off the Tribune Tower in downtown Chicago, floating it over to CIM Group for $240 million in cash money.
So, what becomes of the Tribune Tower? Lots. CIM isn’t one of those companies that buys a property if it doesn’t already have big plans for it, and we should expect no less from it this time. Remember Block37.
Previously, plans have been floated to turn the Trib Tower into everything from Gatsbyesque überluxe condominiums to boutique hotel space to… get this… offices. But the real play is in the backyard, where a surface parking lot will surely be elevated to something bigger, better, skyscrapier. It’s a big enough part of the transaction that CIM even mentions it in the first paragraph of its press release.
The sale of the former corporate headquarters building in Chicago is a bit of delicious schadenfreude for the staffers at the Los Angeles Times, many of whom harbor supertankers full of ill will for their Chicago overlords at Tronc (rhymes with “plonk”), once part of the Tribune Company. It was the former Tribune Company’s takeover of the Times-Mirror Group that marked the moment when Tribune bit off more than it could chew, jumped the shark, and ate its own tail. Sam Zell’s Sideshow Circus may have hastened it along, but the fields were salted long before he showed up.
Press release follows.
CHICAGO, Aug. 30, 2016 — Tribune Media Company (NYSE: TRCO) today announced that an agreement has been reached to sell Tribune Tower in Chicago to CIM Group for $205 million paid in cash at closing and an additional payment of up to $35 million contingent upon the satisfaction of certain conditions, for total consideration of up to $240 million. The sale is expected to close in the third quarter of 2016. Built in 1925, the iconic building is 35 stories high and has nearly 740,000 square feet of space. The sale also includes a 36,000-square-foot development site located directly to the east of Tribune Tower, fronting Cityfront Plaza.
“Tribune Tower has been a unique part of Chicago’s skyline since the 1920s,” said Peter Liguori, Tribune Media’s President and Chief Executive Officer. “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.
“Nonetheless, monetizing the significant assets of Tribune Media’s real estate portfolio is a strategic priority for the company and we are extremely pleased with the outcome of this sales process,” Liguori continued. “Importantly, we’re achieving prices consistent with the $1 billion valuation of our portfolio.”
Since the beginning of the year, Tribune Media has sold several smaller properties in markets ranging from South Florida to Seattle for gross proceeds of approximately $89 million. Earlier this year, the company announced that it had agreements to sell the north block of the Los Angeles Times Square property and the nearby Olympic printing plant, both in Los Angeles. Those sales are also expected to close in the third quarter of 2016.
“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,” said Avi Shemesh, Co-Founder and Principal of CIM Group. “After being active in the Chicago market for more than a decade, we have recently made several compelling investments that have expanded our growing presence in the city.”
CIM Group is a leading real estate and infrastructure firm that invests in dynamic and densely populated communities throughout North America. As an experienced owner and manager of historic properties, CIM works to maintain their integrity through refurbishment and repositioning in order to add to the overall vibrancy and value within a given community. CIM’s investments in Chicago include Block Thirty Seven, Marquee at Block 37, and 440 S. LaSalle, among others. CIM has had notable success with similar properties in both downtown Los Angeles and Manhattan.
Disclosure: The author of this article and the owner of this publication is a former Tribune Company employee, and wouldn’t cry if the earth opened up and swallowed what’s left of the company whole.