The check could be in the mail from a buyer by the end of the year for Chicago’s old Central Post Office building athwart the Eisenhower Expressway.
The 2.6 million-square-foot colossus, built in the 1930s, has attracted a number of offers since mid-June, when CB Richard Ellis in downtown Chicago began sending out a marketing package on the landmark.
The real estate firm, which succeeded Hines Interests in May as manager of the building for the U.S. Postal Service, has set a deadline of Sept. 11 for offers from prospective buyers.
After that, the offers will be boiled down to about 10 candidates who will be interviewed, said CB broker John Dempsey, who is marketing the property with colleague Bob Gillespie.
“We have a big interest in what and how they will create what they want to create, to understand how long it will take and what process they will go through,” Dempsey said.
He said confidence in the potential of the huge property as a multiuse complex is growing, with mixes of residential, office and retail among the strongest plans submitted. Many bids are from groups whose partners want to concentrate on different aspects of the mix, he added.
While the Postal Service’s goal is to sell the property, offers from potential tenants to lease part of it are being considered, Dempsey added. “We don’t want to lose any opportunity,” he said.
One bidder is Michael Lerner, president of Chicago’s MCZ Development, which is redeveloping buildings into 500 residential loft units just south of the Post Office.
Lerner, who submitted a bid when Hines was handling the property, said the eventual deal is likely to be very complicated because of the size of the building and environmental, maintenance and easement issues–the latter dealing with the expressway running through it and the railroad tracks under it.
“It makes a great post office,” he observed wryly.
Lerner, who is thinking about a mix of residential, retail and warehouse and distribution uses, said he is personally convinced something will be done with the Post Office despite all the problems, because of its location and the landmark’s architectural grandeur.
But he doesn`t underestimate the challenge. “With 2.6 million square feet, just to hire someone to sweep it costs millions,” he said. “It would be $250,000 just to wash the windows.”
Station addition: Speaking of West Loop monuments, a Chicago developer is reportedly negotiating with Amtrak on a revamp of Union Station that would incorporate a hotel and conference center in that grand monument to the great age of railroading, as well as add new office space on top of it.
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Plans are said to call for adding four or five stories for offices onto the building at Clinton and Adams Streets, which was constructed during the 1920s.
The hotel, which could have up to 250 rooms, would be built into the original structure, incorporating some of the elegant interior for ballroom or other uses.
A $32 million renovation of the station by Amtrak and Metra was completed in 1991 to brighten up the interior and improve passenger flow, but a more elaborate redevelopment by U.S. Equities Realty Inc. that would have put twin 26-story office towers over the building never got on track.
That plan fell victim to the real estate slump, but also ran into opposition from preservationists who feared a desecration of the building, which was originally drawn up by Daniel Burnham but finished by later architects.
A more modest vision honoring the character of the venerable giant might fare better.
Supersales: A Grubb & Ellis report says purchases of Class B office buildings downtown totaled 6.2 million square feet priced at $893 million for the first six months of 1998, compared with 3.7 million square feet priced at $382 million for all of 1997.
Among those older but still attractive office buildings changing hands were the Merchandise Mart Plaza, the Apparel Center, 180 N. LaSalle St. and 208 S. LaSalle.
The B building sales came to 78 percent of all office sales downtown, which totaled more than 7.9 million square feet from Jan. 1 through June 30. That total is about on a par with the 1997 sales pace for all office buildings downtown, according to Grubb & Ellis.