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Expert: Zell Could Get Over $200M For Trib Tower

CHICAGO-The Tribune Co., led by local real estate icon Sam Zell, may sell the Tribune Tower, as well as Times Mirror Square in Los Angeles.

By Gina Kenny | Updated on June 27, 2008

CHICAGO-The Tribune Co. is considering the sale of the famous Tribune Tower, at 435 N. Michigan Ave. The company “will explore strategic options for maximizing the value of the Tribune Tower, located in downtown Chicago, and Times Mirror Square, located in downtown Los Angeles,” according to a statement from Tribune Co. The company is currently soliciting proposals from real estate firms. Tribune Co. “intends to maintain an ongoing ownership position in the Tower and in Times Mirror Square,” according to the statement.

Based on median sales in the area and the size of the building, the tower would sell at approximately $200 million, says Sam Chandan, chief economist for locally-based REIS. However, because of the Tribune Tower’s “unique status,” Chandan expects the tower could sell for more than that. “Our expectation is that the property would command a significant premium over the observable transaction prices for recent activity in Chicago,” he says. The property also has a “potentially underutilized parking lot that would come with it,” Chandan says.

Tribune Tower is a 40-story building with 940,000 sf of rentable space with an adjacent parking lot, which is nearly an acre, according to the statement. The building was completed in 1925, according to information on the Chicago Tribune’s website. “Both Tribune Tower and Times Mirror Square are iconic structures, deeply intertwined with the history of this company. But, they are also both under-utilized, and as employee-owners, it’s in our best interests to maximize the value of all our assets,” Tribune Co. chairman Sam Zell said in a memo to employees.

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