Google to Buy 17-Story Thompson Center in Chicago’s Loop

Illinois Gov. JB Pritzker, Google and Chicago-based Prime Group have announced a deal for the tech giant to buy the 17-story James R. Thompson Center in the Loop central business district.

The Thompson Center, named for a former governor, has housed state government offices since it opened in 1985.  The state agreed last year to sell the center to Prime for $70M, with Prime announcing it would undertake a $300M renovation to include a makeover for the iconic glass façade of the high-profile building, which is shaped like a large sail.

As part of last year’s deal with Prime, the state agreed to occupy 427K SF of the Thompson Center and said it would either buy back the building after the renovation or lease it for $258M with a 30-year lease term.

Under the revised deal announced this week, Prime will buy the entire building—including the state office space—for $105M and will renovate it for Google, who will buy the building when the renovation is completed. The sale price to Google was not disclosed.

The state will receive $30M in cash from Prime and will take ownership of 115 S. LaSalle St., which includes about 592K SF of rentable space, part of a two-building acquisition that Prime is in the process of closing and also plans to renovate.

“With one of the top locations in downtown Chicago, we knew that after the planned renovation that [this] iconic building would attract world-class tenants. These transactions are transformative for the state and the city and will create key anchors for the future success of Chicago’s downtown district and LaSalle Street for many more generations,” said Mike Reschke, Prime Group CEO, in a statement.

According to reports, the revised deal for the Thompson Center came together after BMO Harris Bank and the law firm Chapman & Cutler—the two largest tenants at 115 S. LaSalle Street—moved into the new 50-story BMO Tower in Chicago. The loss of the two tenants induced Union Bank, lender of $191M against the LaSalle building and a tower at 111 W. Monroe Street, to sell the loan at a loss.

Prime is retaining the 611K SF Monroe Street building. The company says it will keep the first 12 floors of the building as office space and convert the upper floors into about 500 apartment units.

Google, which currently has 2,000 employees in office buildings in the Fulton Market District in Chicago, is planning to move its workforce into the Thompson Center in 2026.

The state reportedly has begun moving its workers to other office buildings in Chicago, including a property the state acquired last year at 555 W. Monroe Street.

According to a statement from Gov. Pritzker, the deal with Google and Prime will save state taxpayers nearly $1B over the next 30 years as part of the governor’s ongoing effort to consolidate the state’s office footprint and cut real estate costs.

“The Thompson Center gives us a presence in the central business district, enabling us to get in on the ground floor of revitalizing the Loop with its unparalleled access to public transit, which is so important for today’s hybrid workforce,” said Karen Sauder, a Google spokesperson.

The deal with Google is a much-needed shot in the arm for Chicago’s downtown, which this year has seen industry giants Boeing and Caterpillar announce they are moving their headquarters out of the Windy City, to Arlington, VA and Irving, TX, respectively.