CHICAGO—A lot of rumors have swirled around the eventual fate ofthe city's old Main Post Office Building, butyesterday officials from Sterling Bay Companiessaid they would partner with owner Bill Davies,chair of International Property Developers NorthAmerica, to redevelop the property. The partners envisionthat the first phase will cost $500 million and transform thehulking structure, which arches over the EisenhowerExpressway, into 2.7-million-square-feet of modern officespace and retail amenities.

“This will be a total gut rehab, but we've been buying up a lotof older buildings like this and successfully filling them up,”Andy Gloor, managing principal of Sterling, tellsGlobeSt.com, and that experience has allowed the company to gaugethe level and type of demand in the submarket. The building'svintage character will make it appealing to a host of companieslooking for downtown space, and the massive floor plates will servethe needs of large users.

Walgreens, which currently occupies about1.7-million-square-feet in north suburban Deerfield, hasalready checked out the space, according to mediareports. And Gloor says that just yesterday he had several meetingswith possible tenants. “We're under confidentiality agreements withall of the potential users, but we think this is going to beoccupied by one or two large office users; at most four orfive.”