On September 11, 2026, an 82,000 square foot office building at 233 E. Erie Street in the Streeterville neighborhood of Chicago sold for $2 million, or approximately $24 per square foot. The price represented a massive 95% discount from the building’s last sale in 2019, when it sold for $40 million, or $486 per square foot.
The sale of the Erie property is not an aberration in the post-COVID market for office space in downtown Chicago but instead reflects a broader trend of large discounts from just a few years prior. 311 S. Wacker Drive, a 65-floor office building, sold for $45 million in June 2025, which was an 85% discount from its last sale price in 2014. The 2025 transaction valued 311 Wacker at just $35 per square foot. 161 N. Clark Street sold in March 2026 for $125,000,000, which was a 62% discount from its prior sale in 2013.
To be sure, some downtown office properties have bucked the trend of significant discounts. The market has increasingly become divided between properties that can attract and retain tenants and those that struggle to remain competitive. In this flight to quality, class A buildings with modern amenities, high occupancy rates, and strong tenant commitments continue to command higher values. Older properties with substantial vacancies and leasing costs face a more difficult environment.
The Disconnect Between Sale Prices and Assessed Values
Highly discounted sales of downtown office properties present an assessment issue that the Cook County Assessor has thus far not fully addressed. The assessed market value of the Erie Street property, which is the value ascribed by the Assessor, was published at $11,650,000 during both the 2025 and 2026 tax years. The 2026 assessment remains subject to appeal, so the final valuation may yet be reduced. However, as of initial publication, the Assessor has set the property’s value at nearly six times its sale price.
Timing is a consideration. Illinois generally requires properties to be valued as of January 1 of the assessment year at issue. The Erie property’s transaction closed eight months into 2026, so its sale would not automatically be considered in the current year’s assessment. Moreover, Chicago’s next general reassessment is in 2027, which would be the first opportunity for the Assessor to completely revalue not just the Erie property but the entire city.
Nevertheless, the broader issue remains whether assessments have come close to maintaining pace with changing market conditions and whether individual properties have been valued in a way that reflects the current reality of the office market.
Under Illinois law, a recent arm’s length sale between unrelated parties after a property was advertised on the open market should be highly correlated with market value. That does not mean that every recorded sale price must automatically become the assessed value. Terms of a transaction, interests conveyed, and valuation date all matter.
However, as the Erie Street property indicates, assessed market value and sale price are sometimes not simply unaligned; they can be dramatically different.
Why Office Devaluations Affect Property Taxes Beyond the Office Market
The sales of discounted Loop and Loop-adjacent office properties and their potential reduction in assessed value affect more than just downtown Chicago. Throughout Chicago and Cook County, commercial properties are assessed at 25% of market value whereas residential properties are assessed at 10% of market value. When commercial property values decline relative to residential values, residential properties will account for a larger share of the taxable base. If local taxing bodies do not reduce their tax levies, properties that have seen their share of the tax base increase will also see an increase in their tax bills.
Moreover, when the commercial heart of the city sees a substantial drop in assessed value, the resulting increase to residential properties may be significant. Downtown office buildings generally have some of the highest valuations in Cook County, so a substantial decrease to their valuations inevitably will lead to a noticeable shift in property tax collections.
The effects of this shift were already apparent during the City of Chicago’s last reassessment in 2024. With the City’s next reassessment arriving in 2027, the shift from commercial to residential tax liabilities may only intensify. 233 Erie’s discounted sale price is one of many recent examples of this trend, and to maintain assessment accuracy, 2027 assessments should reflect a decline in value across much of the downtown office market.
Whether 2027 assessments as initially published will reflect this change, and the exact extent to which the tax burden shifts, is yet to be seen.
Jason Newton leads the property tax reduction group at SFBBG. For assistance with property tax appeals, Jason can be reached at Jason.Newton@sfbbg.com or at 312-775-3614.
