Deal or No Deal?

Chicago’s iconic post office that straddles the Eisenhower Expressway has been vacant since a new facility replaced it in 1995, and the U.S. Postal Service has decided it’s time to sell the deteriorating structure at 433 West Van Buren Street.

On August 27, the Postal Service will auction the 77-year-old, 3,000,000 SF, 14-story building.  The suggested opening bid is $300,000, but because there is no minimum, the building’s ultimate sale price could be significantly higher or lower.  Even auctioneer Rick Levin has no idea of how much the building might be worth. “I don’t know that there’s a more unique, hard-to-value piece of real estate in Chicagoland than this,” Levin said.

Since the Postal Service moved to a new Harrison Street building 14 years ago, it’s been suggested that the old space be used as a casino, a water park or an auto mall.  In 2007, the city gave initial approval to a failed plan with an estimated price tag of $300 million, including $62 million in local and federal incentives, to develop the complex into condominiums, offices and a hotel.

If a buyer is found, it will have to secure financing – a significant challenge in today’s tight lending environment — as well as deal with the property taxes.  Once the world’s largest postal facility, the building has always been property tax exempt.  Its eventual assessed value will be based on its future uses and the revenues derived from those uses.