Chicago Capone-Era Post Office to be Sold at Auction Today
Bloomberg reports: Chicago’s former Main Post Office Building, a landmark completed the year gangster Al Capone went to prison for tax evasion, will be sold at auction today with a starting price of $10 a square foot.
The suggested opening bid is $300,000 for the 14-story, 3 million-square-foot property, according to auctioneer Rick Levin & Associates Inc. Replacement would cost more than $300 million, the Chicago-based firm estimates. Office space in the city’s downtown peaked at $224 a square foot in 2007, data from research firm Real Capital Analytics show.
“It’s not often you see a building of this magnitude go up at public auction,” said Lisa DiChiera, director of advocacy at Landmarks Illinois, a preservation group in Chicago. “It’s one of the grandest, biggest, U.S. post offices ever built.”
The U.S. Postal Service, which reported a net loss of $2.4 billion in the third quarter, is selling property to cut expenses as electronic communication usurps old-fashioned letters and packages. It costs about $2 million a year to keep the Chicago property, according to a report by Congress’s General Accountability Office.
U.S. commercial real estate prices have fallen by a third since the market peak in 2007, in part because it’s harder for investors to get credit. Loan originations for offices, shops, hotels, apartments and health-care facilities plunged 70 percent in the first quarter from a year earlier, according to the Washington-based Mortgage Bankers Association.
Commercial real estate values in the U.S. fell 27 percent in the year through June, according to the Moody’s/REAL Commercial Property Price Indices.
Chicago area sales plunged 86 percent in the first half compared with a year ago to $682 million, according to New York- based Real Capital Analytics.
View the full article on Bloomberg: Chicago Capone-Era Post Office to be Sold at Auction Today
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