Deitcher, Sterling Buy 108,000-SF CHA Office

CHICAGO-A joint venture between the Deitcher Group and Sterling Bay Cos., both based here, has acquired 626 W. Jackson Blvd. The Chicago Housing Authority sold the 107,977-sf loft office building to the joint venture for $7.7 million, says Menahem Deitcher, principal with Deitcher Group. The building is completely vacant, Deitcher tells GlobeSt.com.

The Chicago Housing Authority (CHA) had used the eight-story building as its headquarters until it relocated last summer to 60 E. Van Buren. Sean Reynolds with the Staubach Co. represented CHA. The joint venture partners represented themselves.

The joint venture plans a long-term hold for the property, Deitcher says. “We believe the West Loop is an office market that is only getting stronger in the years to come,” he says. “And, the West Loop has always been the strongest market.”

The joint venture plans to renovate the building with the construction of a new lobby and renovating the bathrooms and corridors, he says. A new elevator will also be installed. The building has 12-foot floor-to-ceiling heights and approximately 15,000-sf floor plates. Work is expected to begin by the second quarter and be completed by the end of the second quarter of this year. Deitcher said he could not give an estimate for the cost of the renovations yet but that the cost will be “significant.”

The joint venture reportedly obtained a $14.5-million loan from Private Bank to finance the acquisition and renovation. The Deitcher Group will handle the leasing of the building. The asking lease rate for the building is between $24 per sf and $26 per sf gross, Deitcher tells GlobeSt.com.