Portland’s Menashe Properties has doubled down on Chicago office space, purchasing a 31-story tower in the West Loop area for $51.5 million.

The commercial real estate firm closed on its acquisition of 125 S. Wacker Drive on Friday, according to an announcement. It is Menashe’s second major purchase in Chicago, after the acquisition of 230 W. Monroe Street, a 700,000-square-foot tower, in 2023.

“It is amazing the momentum in Chicago,” said Jordan Menashe, the firm’s CEO and principal.

The seller was La Caisse, a major investment firm based in Quebec, Canada.

Chicago’s office market is heating up, Menashe said. Meanwhile, developers can’t build spaces on speculation fast enough, he added.

“You can’t move fast enough for the market right now,” he said. “It is under-officed.”

The recent purchase values 125 S. Wacker Drive, a 640,000-square-foot property, at approximately $80.47 per square foot. The building is across Adams Street from Willis Tower, formerly Sears Tower – the tallest building in Chicago and the third-tallest building in the United States.

Menashe Properties often looks to purchase somewhat distressed assets and increase their occupancy. In 2024, the firm purchased Montgomery Park, a 768,443-square-foot building in Northwest Portland, for $33 million after it was foreclosed upon.

The Chicago building at 125 S. Wacker Drive is 63 percent leased, Jordan Menashe said. It has no anchor tenant.

“There is no tenant that has more than one floor,” Menashe said. “What does that do for you? It offers you flexibility.”

Chicago’s most desirable office space is occupied, leading tenants to consider the next tier, Menashe said.

“Trophy, class-A (office space) is full,” he said. “Class-C is never coming back.”

The Wacker Drive property is an “A to A-minus” property, he said.

Occupancy at Menashe’s other Chicago property, 230 W. Monroe Street, grew from 60 percent to 85 percent in less than two years, Jordan Menashe said. Stream Realty Partners will lease and manage both properties.

Menashe Properties’ Chicago purchase comes as dealmakers establish a new, post-pandemic ground floor for downtown Portland office values. The PacWest Center sold last week to an Alaska developer for a reported $55.7 million, or $101.64 per square foot.

In July, the U.S. Bancorp Tower — better known as Big Pink — sold for $45 million, or about $39.13 per square foot.

Office property is gaining momentum in other West Coast cities, Menashe said.

“It’s starting to build in San Francisco and Seattle, which bodes well for good ol’ Portland,” he said.

Menashe said Portland is perhaps seven years behind Chicago’s office market.

Portland has cleaned up since the pandemic, he added, but it lacks attractiveness to businesses.

“They have to lower taxes in Multnomah County,” he said.

Menashe Properties was founded by Jordan’s father, Barry, in 1978 and is one of the largest owners of Portland real estate. The company owns more than 7 million square feet of commercial real estate, including, in Portland, the 12th & Morrison Building in the West End, the Plaza on 6th, the American Bank Building and the JK Gill Building. The firm also owns major commercial properties in Dallas, Seattle and Denver.

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The PacWest Center in downtown Portland has sold to an Alaska buyer at a steep discount, according to a report.

Willamette Week late Wednesday that the property sold for $55.7 million, or $101.64 per square foot. The price is less than half its most recent pre-pandemic transaction, but higher than the price for another iconic tower that recently sold.

A deed of trust filed with Multnomah County on Thursday shows the buyer used a $44.58 million loan from the First National Bank Alaska, based in Anchorage. Another public filing, the special warranty deed, shows the property sold for $10 “and other good and valuable consideration,” hiding the true purchase price.

Fountainhead Development, based in Fairbanks, Alaska, purchased the 30-story office building, the fourth-tallest building in Portland, from an entity linked to Lincoln Property Co.

The 547,992-square-foot building at 1211 S.W. Fifth Ave. was developed beginning in 1984 by Tokyo-based Mitsubishi Estate Co. and completed in 1988. It was extensively renovated in 2019. The sleek silver tower is well-known locally for its outdoor tree, planted on the 25^th floor.

The building last traded hands for $161.5 million in December 2007. Commercial real estate in Portland has traded at much lower prices since the pandemic emptied out downtown office towers. The city has approximately 9 million square feet of vacant office space.

PacWest’s recent sale gave it a significantly higher valuation than the U.S. Bancorp Tower — better known as Big Pink — earned when it sold for $45 million, or about $39.13 per square foot, in July.

Newmark Vice Chairman Nick Kucha, Senior Managing Director James Childress and Directors Kellen Kollmorgen and Jakob Nicholls represented the seller.

“PacWest exemplifies resilience and opportunity in Portland’s evolving office market,” Kucha said in a prepared statement. “With its transit-oriented location, market-leading amenity package and premium view space, the buyer recognized the tower’s ability to cater to both traditional and creative tenant requirements in a location with enduring demand drivers.”

The property is 50 percent leased, primarily by legal, banking, wealth and investment management firms, according to Newmark.

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