Allstate buys downtown building for possible headquarters

A 10-story office building at 29 N. Wacker Drive, long overshadowed by taller and newer towers on that thoroughfare, could become the corporate headquarters of Allstate, the insurance company said Wednesday.

Allstate said it has acquired the building as a possible replacement for its vast Northbrook headquarters, which it is selling for $232 million. The Northbrook sale could close in 2022 but depends on the buyer getting government approvals to redevelop the property.

In an email, Allstate spokesman Ben Corey confirmed the downtown purchase but did not disclose the price. “We are in discussions with the City of Chicago about potential uses for the building, which could become an investment property, a space to consolidate our existing downtown offices or our new headquarters,” Corey said.

The building dates from 1961 and is 63% leased, according to an offering flyer by the real estate firm Jones Lang LaSalle. The flyer indicated the building, with about 133,000 rentable square feet, could be purchased for about $36 million.

Property records show the seller is Sun Life Assurance of Canada, which paid $13.4 million for the building in 2010. It has gone through a substantial renovation, and the Jones Lang flyer called it a “boutique jewel-box office asset” on a prestigious street. The real estate broker had no immediate comment.

Allstate has downtown offices at 444 W. Lake St. and in the Merchandise Mart. On its website, it reports having almost 7,900 workers in Illinois.

The company has said it wants to reduce its real estate costs, in part, because many employees are working from home because of the pandemic. Trimming property expenses also would help Allstate compete against insurers that promise lower rates on auto and home policies.

Its suburban home, at 2775 Sanders Road, is a campus setting with almost 2 million square feet of offices. The buyer, Dermody Properties, has said it will invest $500 million to convert the site into a warehouse complex.

The property has a Northbrook mailing address but most of it is in unincorporated Cook County. It has been Allstate’s home since 1967.