$45 Million Sale of 311 S. Wacker Marks Sea Change in Chicago Office Space Valuations

After years of stalled deals and declining tenancy, one of Chicago’s tallest skyscrapers has finally sold—at a staggering discount. The 65-story office tower at 311 S. Wacker Drive has been acquired by Long Island-based Kohan Retail Investment Group for just $45 million, according to people familiar with the transaction.

That price is less than 15% of the $302 million paid in 2014 by Chicago-based Zeller Realty Group and its Chinese investment partner, Cindat Capital Management, highlighting the sharp reset in downtown Chicago office space valuations post-pandemic.

A Tower Once Prized, Now Repriced

Towering at 961 feet and known for its illuminated crown adjacent to the Willis Tower, 311 S. Wacker was once a trophy asset. Completed in 1990 by Lincoln Property Company, it boasts nearly 1.3 million square feet of office space in a core Wacker Drive location.

But with persistent vacancy, tenant losses, and a $215 million loan from Morgan Stanley tied to the property since a 2018 refinancing, the building has faced enormous financial strain. Several attempted sales have fallen through in recent years, including a $300 million offer in 2022 and a $70 million deal that unraveled just months ago.

Kohan’s Big Bet on Office

The new buyer, Kohan Retail Investment Group, is better known for scooping up distressed retail centers across the country. But in the current environment, where prime towers trade for fractions of replacement cost, office assets have drawn in unconventional investors.

Kohan’s strategy for the building? No radical office conversion to apartments or hotel. Instead, founder Mike Kohan told media outlets that he’s focused on leasing up large blocks of vacant office space, betting on the property’s central location and iconic presence.

This is not Kohan’s first move into urban office real estate. The firm recently partnered on an $85 million acquisition of a 25-story Manhattan office tower at 345 Seventh Avenue—reportedly with plans for a residential conversion. Kohan’s willingness to hold 311 S. Wacker as a traditional office asset may indicate a long-term belief in downtown Chicago’s eventual rebound.

What This Says About the Chicago Office Market

The deep discount on 311 S. Wacker’s sale is part of a broader trend: lenders, owners, and developers recalibrating expectations on large, older office towers. Unlike newer Class A buildings or boutique repositionings, these legacy skyscrapers face outsized challenges in a post-COVID landscape—higher vacancy, capital expenditure needs, and a thin pool of prospective buyers.

But for opportunistic investors with patient capital and a new cost basis, deals like this one may offer real upside.

The Path Forward

Whether Kohan can breathe new life into 311 S. Wacker will depend on strategic leasing, tenant retention, and a market willing to absorb significant space in a softened core office market. But the new ownership structure eliminates heavy debt burdens, opening the door for creative repositioning strategies.

If you’re evaluating your own approach to office space in Chicago, this sale is a powerful signal. As values reset, opportunities are emerging, not just for national buyers, but for local investors and tenants alike.

To explore your options in today’s shifting market, contact a trusted Chicago commercial real estate agent who understands how to navigate this new environment.