After almost a century in its namesake tower on North Michigan Avenue, the Chicago Tribune is close to a deal to move a few blocks south.
The newspaper's parent company, Tronc, is in advanced negotiations to lease space in Prudential Plaza, a two-tower office complex that overlooks Millennium Park, according to sources. The deal has not been finalized and could still fall apart.
If a deal is completed, the Tribune's newsroom and other offices and Tronc's corporate headquarters will move by mid-2018 to about 130,000 square feet in One Prudential Plaza, the sources said.
The deal comes as Chicago developer Sterling Bay is in the process of buying the two-building office complex for about $680 million. The seller is New York-based 601W Cos.
A Tronc spokeswoman and Sterling Bay managing principal Andy Gloor declined to comment, and 601W principal Mark Karasick did not immediately respond to a request for comment.
The deal would put the Tribune newsroom and offices on the second, third and fourth floors of One Prudential Plaza, with some Tronc executives on the top two levels of the 41-story building.
The Tribune has been shopping for new office space because its 92-year-old namesake tower was sold last year and is expected to be redeveloped by its new owners. Broadcast company Tribune Media had been the Chicago Tribune's landlord until it sold the property, and the newspaper's lease expires at the end of next June.
Prudential Plaza is just east of Michigan Avenue along Randolph Street. The office complex is along the northern side of Millennium Park.
Tribune Tower is one of the city's most recognizable buildings because of its neo-Gothic architecture and ornate lobby, as well as its location on the Magnificent Mile shopping corridor. It was completed along the northern edge of the Chicago River in 1925.
The tower's blueprint emerged from an architecture competition in which the Tribune's co-editors and co-publishers, Col. Robert R. McCormick and Capt. Joseph M. Patterson, asked architects to design "the most beautiful and distinctive office building in the world." The tower designed by John Mead Howells and Raymond Hood became a Chicago landmark in 1989.
Tronc is being represented by Jones Lang LaSalle brokers including David Miller and Meredith O'Connor. 601W is represented by Matt Pistorio and Bill Truszkowski of Telos Group.
The Tribune's move off the Mag Mile was first put in motion in 2014, when the Tribune Co. renamed itself Tribune Media and spun off its publishing division — whose daily newspapers include the Tribune and Los Angeles Times — into a separate company now known as Tronc.
Tribune Media kept the broadcasting business and real estate throughout the country, with newspapers including the Tribune becoming Tribune Media's tenants. Tribune Media has been cashing in on the real estate portfolio's value by selling some properties and forming partnerships to redevelop others.
Tribune Tower's buyers, Los Angeles-based CIM Group and local partner Golub & Co., have yet to publicly reveal their plans. They are expected to convert the 36-story landmark tower to a new use, such as a hotel, apartments or condominiums, as well as new retail. CIM is also believed to be planning a large new tower on a parking lot east of Tribune Tower.
Since completing the sale of Tribune Tower for $205 million — plus another potential $35 million based on unspecified conditions — Tribune Media has leased office space just south of the river on Wacker Drive. The owners of ground-floor restaurant Howells & Hood recently said it will close in late 2018 to make way for the building's redevelopment.
Since 2013, Prudential Plaza has been owned by a venture of New York-based 601W. It took control of the then-financially distressed property in a deal in which it agreed to invest about $100 million toward upgrades to the buildings and adding new tenants.
Built 30 years after Tribune Tower, One Prudential Plaza — then known as the Prudential Building — was Chicago's tallest structure when it was completed in 1955. The boxy building was constructed as the headquarters of Prudential Insurance's Mid-America Co.
Alfonso Iannelli's relief sculpture of the insurer's Rock of Gibraltar symbol remains carved into a low-rise portion of the building's limestone exterior.
A connected 61-story office tower with a pointed top was completed in 1990, boosting the complex to about 2.3 million square feet of total space.
During its ownership, 601W has made several changes including a major lobby renovation and the addition of a large roof deck and fitness center on the 11th story of One Prudential Plaza, where a wider low-rise portion of the building extends out toward Randolph.
Other tenants in One Prudential Plaza include law firm Clark Hill, public relations firm Cision and software-maker Textura. Wilson Sporting Goods plans to move its headquarters there, from an office near O'Hare International Airport, by the end of this year.