Fast-growing Chicago-based real estate developer Sterling Bay Cos. recently closed on its acquisition of the four-building West Side facility of the production company founded by Oprah Winfrey, paying a combined $30.5 million in five different land transactions for about 170,000 square feet of space.
Back in October, representatives of Winfrey’s Oprah Winfrey Network confirmed that the onetime talk-show queen’s Harpo Productions had hired a real estate firm to evaluate selling some of the 3.48-acre Harpo Studios campus.
Then, in March, Harpo officials announced that they had agreed to sell the campus to Sterling Bay for an undisclosed amount and lease it back to Harpo for two years.
Now, on May 7, the deal closed for $30.5 million. The biggest chunk of the purchase price was for the 103,000-square-foot studio and office space at 110 N. Carpenter St., which is where Winfrey’s eponymous talk show was filmed until it ended its run in 2011.
That property, which consumes an entire city block, sold in two separate transactions for $16.7 million and $1.8 million. A two-story, 32,000-square-foot office building at 113 N. May St. sold for $5.85 million, a two-story, 19,000-square-foot office building at 1115 W. Washington Blvd. sold for 3.31 million and a 1.5-story, 16,500-square-foot office building at 118 N. Aberdeen St. sold for $2.84 million.
Two existing Harpo subtenants -- Campus Insiders and 120 Sports -- will continue to lease a combined 26,000 square feet of space in the complex until September 2015 and April 2016, respectively. The deal also spells out that Harpo’s lease extends until April 30, 2016.
In his first interview since the deal closed, Sterling Bay Managing Principal Andy Gloor told the Tribune that his firm hasn’t yet decided any redevelopment plans for the campus.
“The West Loop is in need of some high-end residential development. With the office population in the West Loop going up, there’s a real need for residential. That said, our expertise is in office, and some big office user may want to be out here,” he said. “The nice thing about this deal structure is that the two-year leaseback gives us some time to figure out what’s best.”
Harpo has been based on that property since 1988, when Winfrey moved her talk show to the then-struggling city neighborhood, setting up camp in what then was an 88,000-square-foot facility. With a small team of investors, she bought the facility and later expanded it. In the years since, the neighborhood has developed into a dining, shopping and residential spot, with Winfrey’s presence credited for helping the renaissance.
Via email, a Harpo spokeswoman confirmed that the company would remain on the campus for at least the next two years.
“We have completed the sale of the four-building Harpo Studios campus in Chicago’s West Loop to Sterling Bay,” she said. “Two of the four buildings that were occupied by Harpo prior to the sale will continue to be leased back for two years and the studio will continue to produce programming for OWN.”
Stephen Livaditis of Eastdil Secured represented Harpo in the deal.
Winfrey has continued to pull back on her ownership of other area real estate. Just over a year ago, she took a major hit on the sale of the retail condo at 1017 W. Washington Blvd. that had held her now-shuttered Oprah Store, selling it for $875,000.
Her four-unit duplex condominium on North Michigan Avenue remains on the market for $7.75 million. She continues to own small residential properties in Elmwood Park and Merrillville, Ind.Copyright © 2014, The Baltimore Sun