Tribune Media Co. announced Tuesday it has agreed to sell Tribune Tower to developer CIM Group in a deal valued at $240 million.
Both Tribune Media and the Chicago Tribune are likely to move out of their longtime home at 435 N. Michigan Ave.
Officials didn’t specify development plans for the 1925 neo-Gothic tower. The building was named a city landmark in 1989.
The sale is expected to be completed by the end of September.
Tribune Tower is a 35-story building and contains nearly 740,000 square feet of space. The sale includes a 36,000-square-foot development site to the east fronting Cityfront Plaza.
“It is a gem of architectural and structural accomplishment and a constant reminder of the important role that Tribune has played in the development of the city itself,” Peter Liguori, Tribune Media’s president and CEO, said in a news release.
“Nonetheless, monetizing the significant assets of Tribune Media’s real estate portfolio is a strategic priority for the company and we are extremely pleased with the outcome of this sales process,” Liguori continued. “Importantly, we’re achieving prices consistent with the $1 billion valuation of our portfolio.”
Tribune Tower was put on the market in October 2015.
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In a note to employees, Liguori said that Tribune Media plans to move out of the Tower but will remain in Chicago, the Chicago Tribune reported.
“As the buyer intends to repurpose the Tower, we will be transitioning our Chicago staff to new space over an extended period of months — likely in the second quarter of 2017,” Liguori said.
The Chicago Tribune, the building’s biggest tenant, and parent company Tronc have “no immediate plans to leave early,” Tronc spokeswoman Dana Meyer told the Chicago Tribune. The newspaper’s lease runs through 2018.
Tribune Media will receive $205 million cash at closing. It will receive an additional $35 million if certain conditions are met.
“Tribune Tower is a prominent property with a rich history that has been a feature of the Chicago skyline for nearly a century. It’s in an area that, today, is attracting new businesses and residents,” said Avi Shemesh, co-founder of Los Angeles-based CIM Group. “After being active in the Chicago market for more than a decade, we have recently made several compelling investments that have expanded our growing presence in the city.”
CIM’s projects in Chicago include Block 37, Marquee at Block 37 and 440 S. La Salle.
Tribune Media took over the radio and TV stations and real estate of Tribune Co. in 2014 when it was split in two. Tribune Publishing, since renamed Tronc, took ownership of the company’s newspapers, including the Chicago Tribune and Los Angeles Times.
Tribune Media has sold several smaller properties totaling about $89 million, including the sale and leaseback of The Baltimore Sun real estate. The company also has deals pending for some of its property in Los Angeles.
Contributing: The Associated Press