Architect Gehry bidder for Inland Steel tower
He's a member of offering group: `I love the building'
By Thomas A. Corfman and Blair Kamin
Tribune staff reporters
Published April 28, 2005
Better known as a designer of buildings than a buyer of them, celebrated architect Frank Gehry has made an unsolicited, top-dollar offer to acquire the landmark Inland Steel Building, one of the city's architectural gems and an icon of skyscraper design.
"I am a part of a group that is interested in making a bid for the building. We're in due diligence now," Gehry said in a brief statement, referring to the study period in which real estate investors conduct research before making a deal.
"I love the building and hope everything works out," he said.
Gehry, who has dabbled in real estate, is part of a small group of investors that includes Chicago real estate executive Harvey Camins. The exact amount of their bid could not be determined, but sources said it was substantially more than $200 a square foot, or roughly $50 million.
The negotiations are expected to reach a make-or-break point in a matter of weeks.
Yet for the famed Los Angeles-based architect, whose projects include the Jay Pritzker Pavilion in Millennium Park and the Guggenheim Museum in Spain, the deal may be more about acquiring a prominent example of Modernist design than about making a secure real estate investment.
Built in 1957, the stainless steel structure was designed by Skidmore Owings & Merrill LLP, which later shaped such massive strongholds as the Sears Tower and the John Hancock Center, structures that are better known to the public. But to architects and engineers the 19-story building at 30 W. Monroe St. is a true trophy.
"Inland is much more iconic," said Stanley Tigerman, a principal in Chicago-based Tigerman McCurry Architects Ltd. "It's not a case of mine is bigger than yours, it's a question of what's good."
Despite its age, the Inland Steel Building is a solid financial performer. The 232,450-square-foot structure is more than 95 percent leased, according to real estate research firm CoStar Group.
The largest tenant is Ispat Inland Inc., a corporate descendant of the namesake steelmaker, which says it occupies 20 percent of the building under a lease that expires late next year.
Ispat is now part of Netherlands-based Mittal Steel Co. NV, which is considering consolidating its North American offices in the Chicago area.
The second-largest tenant is Gensler Architecture Design & Planning, a large San Francisco-based firm with 25,100 square feet of space under a lease that expires in 2011, according to CoStar. At least four other architectural and engineering firms have smaller offices in the building.
A transaction is far from certain. The building's current owner, St. Paul Travelers Cos., has been content to continue its ownership, despite the strong investment market.
"The building is not on the market, though we are periodically contacted by interested parties," said a spokeswoman for the St. Paul-based insurer, who declined to comment further.
Camins, a member of the group and chief executive of real estate brokerage Camins Tomasz Kritt, declined to comment.
There is some irony in the prospect of a Gehry purchase of the Inland Steel Building.
The architect, who has become the king of curvy, shiny metal with such boldly expressionistic structures as the Guggenheim in Bilbao, Spain, would own a building that is very shiny, very metal--and very right-angled. Indeed, Skidmore's design is a prime example of the strait-laced rationalism associated with Ludwig Mies van der Rohe and what is often called the Second Chicago School of Architecture. Nothing may seem more different from Gehry's exuberant, Baroque modernism.
But the two are not as different as they seem. Gehry's Pritzker Pavilion, which opened last summer, fully partakes of the Chicago tradition of exposing or expressing a building's structure. It flaunts an enormous trellis of curving steel pipes that sweeps over an outdoor seating area for 11,000 people. And the pavilion's curving metal shells are covered in stainless steel, as Inland Steel wears a coat of that material.
It is extremely unusual for noteworthy architects such as Gehry to invest in historic buildings, though the practice is not unheard of.
"Few architects care about buildings that aren't in their own aesthetic or by their own hand," said Pauline Saliga, the executive director of the Chicago-based Society of Architectural Historians. In addition, she said, not many architects make enough money to have the surplus cash needed to buy landmark buildings.
But there are exceptions. In the 1970s Chicago architects Harry Weese and Laurence Booth invested in historic buildings in the Printing House Row district, the then-crumbling, now-gentrified area south of Congress Parkway where printing and publishing businesses started to grow in the decade after the Chicago Fire.
"We didn't make any mistakes; we didn't make any huge amounts of money," said Booth, design principal with Booth Hansen Ltd. "We were just mediocre developers."
Gehry knows both sides of the real estate market too.
In a 1999 interview he said his biggest financial mistake was being "overly optimistic about some of the real estate things that I went into."
But when asked about his best financial move, Gehry told MarketWatch.com: "Well it was real estate, too, actually. One of those properties I sold and it paid off. "> |
