West Loop Investment
565 West Randolph Street, Chicago, IL 60661
Class C office building with conversion potential in Chicago's West Loop.
Type:OFC, SCR, MU
Property size:
59,981 SFPrice / SF:
$249/SF- Added:
- Dec 23, 2024
- Days on Market:
- 516
- Last Refresh:
- Apr 3 at 5:02 am
Property Features for 565 West Randolph Street
General Information
- Standard status
- Active
- Size
- 59,981 SF
- Property subtype
- OFC, SCR, MU
Listing agent Anthony Hardy License #475139834 (630) 570-2223
Listing office Keller Williams ONEChicago (630) 570-2223
Listing date Dec 23, 2024
Source Realnex
Displayed information is deemed reliable but is not guaranteed and should be independently verified.
All listing content including descriptions, pricing, images are the copyrighted material of Keller Williams ONEChicago
HighLights
- Significant value‑add potential through office‑to‑multifamily conversion, with 72.8% of the building available by the end of 2024.
- Enjoy stable, immediate cash flow from 98% occupancy, anchored by two Michelin‑starred restaurants.
- Strategic phased redevelopment opportunity maximizes cash flow during conversion.
- Prime West Loop location offers proximity to transportation, shopping, dining, and green spaces.
- Historical charm combined with modern functionality, including passenger and freight elevators.
- Attractive purchase price of $250 per SF, totaling $14,995,000.
Overview
Located in Chicago’s West Loop, this approximately 59,981 square foot Class C office building presents a unique investment opportunity. Constructed in 1872, the property combines historical architecture with modern functionality, and includes both a passenger elevator and a freight elevator. The building is currently 98% occupied with nine tenants. Ground-floor tenants include two Michelin-starred dining establishments, Proxi and Sepia, which have recently renewed their leases for another five years with additional renewal options, ensuring income stability. A key opportunity exists for an office-to-multifamily apartment conversion, allowing investors to capitalize on the increasing demand for multifamily units in the West Loop. A phased approach to conversion is possible, with 43,624 square feet (72.8% of the building) potentially available by the end of December 2024. An additional 1,642 square feet (2.7% of the building) will become available between March and November 2026 as leases expire, offering further flexibility for phased redevelopment. The final 5,550 square feet (9.2% of the building) will become available between January and April 2029 upon lease expirations, enabling investors to continue generating income from office leases while gradually converting spaces to residential use. The property's location offers proximity to transportation, shopping, dining, and green spaces, making it attractive to prospective residential tenants. By converting the office floors to apartments, investors can tap into the strong rental market in the West Loop, while still benefiting from the stable income of long-term retail tenants.
Financial Insights
Value Estimation Calculated for Office B
Conservative
$14.30M
NOI $1,286,952 @ 9.00% cap · cautious / downside scenario
Moderate
$18.39M
NOI $1,286,952 @ 7.00% cap · market / base-case scenario
Aggressive
$25.74M
NOI $1,286,952 @ 5.00% cap · optimistic / upside scenario
NOI & Cap Rate Calculator
NOI Build-Up
- Vacancy
- income lost from leasable area expected to sit empty during the year — subtracted from gross rent.
- EGI (Effective Gross Income)
- gross rent minus vacancy losses — the realistic income before paying operating costs.
- OpEx (Operating Expenses)
- recurring costs to operate the property (property tax, insurance, utilities, maintenance, management) — excludes financing and capital improvements.
- NOI (Net Operating Income)
- income a property generates after operating costs but before financing and taxes.
Calculated for Office B
| Component | $ | $/SF |
|---|---|---|
| Gross rent | $2.30M | $38.40 |
| − Vacancy | −$587.3k | −$9.79 |
| EGI | $1.72M | $28.61 |
| − OpEx | −$429.0k | −$7.15 |
| NOI | $1.29M | $21.46 |
59,981 SF · lease $38.40/SF/yr · vacancy 25.50% · expense 25.00%
Alternative Use Scenarios
Best Use
Office B
$18.39M
$16.09M – $21.45M
NOI $1,286,952 @ 7.0% cap · market cap 8.58%
Second Best
Apartment 5plus
$13.14M
$11.49M – $15.32M
NOI $919,458 @ 7.0% cap · market cap 6.13%
Theoretical Best
Office A
$28.28M
$24.75M – $32.99M
NOI $1,979,661 @ 7.0% cap · market cap 13.20%
Zoning and permitted uses should be independently verified with local authorities.
Location Intelligence
Current Use by Public Records
Proxi
Restaurant
Location Insight
- Map
- Local Demand
- City
- Chicago
- County
- Cook
- State
- Illinois
- Longitude
- -87.64226
- Latitude
- 41.884374
Nearby Similar for Sale
FAQs
What type of property is this?
Office building - Class C office building with conversion potential in Chicago's West Loop.
Where is this office building located?
The property is located at 565 West Randolph Street Chicago, IL.
What is the asking price?
The asking price for this property is $14,995,000.
What are key features of this property?
This property features: Significant value‑add potential through office‑to‑multifamily conversion, with 72.8% of the building available by the end of 2024.; Enjoy stable, immediate cash flow from 98% occupancy, anchored by two Michelin‑starred restaurants.; Strategic phased redevelopment opportunity maximizes cash flow during conversion.
