Los Angeles-based developer CIM Group has agreed to buy Tribune Tower for up to $240 million, marking the end of media ownership for the historic North Michigan Avenue building and the beginning of a new chapter, likely as part of a mixed-use redevelopment.
Chicago developer Golub & Co partnered with CIM to buy the tower and adjacent property from Tribune Media. The deal, announced by Tribune Media Tuesday, is expected to close by the end of September, the company said.
Chicago-based Tribune Media announced in October it hired real estate investment banker Eastdil Secured to explore an outright sale or partnership to redevelop the neo-Gothic tower, which sits on 3 acres. The building has 737,000 square feet of space, but the property is zoned for up to 2.4 million square feet.
Tribune Media unveiled conceptual plans last year to redevelop the parcel, adding several buildings to maximize the space with residential, retail and hotel components.
Built in 1925, Tribune Tower was designed by New York architects Raymond Hood and John Mead Howells, who won a contest held by Chicago Tribune co-publishers Robert R. McCormick and Joseph Patterson to create the newspaper’s headquarters. It was named a Chicago landmark in 1989.
“Tribune Tower has been a unique part of Chicago’s skyline since the 1920s,” Tribune Media CEO Peter Liguori said in a news release. “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.”
CIM’s Chicago footprint has been growing since it acquired the Block 37 complex on State Street in 2012, completing the 34-story Marquee apartment tower at the north end of the retail center in May.
This month, CIM announced it was partnering with Chicago-based Murphy Development Group on a planned 46-story apartment tower at 1326 S. Michigan Avenue, buying the 0.6-acre site in the South Loop.
In June, CIM announced the purchase of 440 S. LaSalle St., a 39-story office building, for a reported $191 million. CIM is also building a 41-story residential tower at 1001 S. State St., in partnership with Golub.
The deal to sell Tribune Tower is the latest news in Tribune Media’s ongoing efforts to sell its entire $1 billion real estate portfolio. This month, the company said the Times Mirror Square building and Olympic printing plant in Los Angeles were under contract with nonrefundable deposits, and the transactions were expected to close in the third quarter. Tribune Media also has sold six smaller properties for about $90 million this year.
“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 said in the news release.
Tribune Media spun off its publishing division — including the Chicago Tribune, Los Angeles Times and other daily newspapers — in August 2014, retaining the broadcasting business and real estate portfolio.
As part of the sale and redevelopment, Tribune Media is planning to move out of its namesake building, but will remain in Chicago, Liguori said in a note to employees Tuesday.
“Although we are selling the Tower, the operational headquarters of Tribune Media will remain in the city,” Liguori said. “As the buyer intends to repurpose the Tower, we will be transitioning our Chicago staff to new space over an extended period of months — likely in the second quarter of 2017.”
Tronc, the Chicago-based newspaper chain formerly known as Tribune Publishing, is Tribune Media’s largest tenant. The Chicago Tribune’s lease at Tribune Tower runs through 2018.
The newspaper and its parent company have “no immediate plans to leave early,” Tronc spokeswoman Dana Meyer said Tuesday.
“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,” Avi Shemesh, co-founder and principal of CIM, said in the news release. A spokeswoman declined further comment.
Tribune Media may sell more than just its real estate. In February, the company hired financial advisers to explore a possible “sale or separation of select lines of business” in a bid to enhance shareholder value. Tribune Media’s assets include 42 TV stations, national cable channel WGN America and Gracenote, its entertainment metadata business.
Twitter @RobertChannick
