The most important number in Kohan Retail Investment Group's acquisition of 131 South Dearborn is not the $137 million purchase price. It is the 76 percent discount from the property's 2006 sale price. That gap is not a markdown. It is a market signal.
The deal shows that office liquidity has returned, but only at a basis that lets buyers underwrite downside before upside. The seller, a partnership of Angelo Gordon, Hines, and Dearborn Capital Group, did not sell because the building is failing. It sold because the capital stack from the 2016 acquisition no longer worked at current interest rates and occupancy expectations. The buyer, Mike Kohan's firm, is not betting on a quick recovery. It is betting that at $91 per square foot, the building can generate a return even if rents stay flat and vacancy remains elevated.
Kohan acquired the 1.5 million-square-foot tower alongside partners Alan Assil and Kevin Assil. The building, completed in 2003, was originally known as Citadel Center. The prior ownership group bought it in 2016, likely at a basis far above today's price. The 76 percent discount from the 2006 peak is not a comp for every office tower. It is a comp for what happens when a building's income profile, leverage, and interest costs converge against the owner.
What this reveals about capital is straightforward. Institutional capital is not chasing office broadly. But opportunistic capital, particularly from sponsors with retail and mixed-use experience, is willing to step in when the basis is low enough to absorb leasing risk, capital expenditure needs, and a higher cost of debt. Kohan's portfolio includes retail, office, and mixed-use properties. The firm is not a traditional office landlord. It is a value-oriented buyer that sources deals where the entry price creates a margin of safety.
The incentive map matters here. The seller needed liquidity. Angelo Gordon, Hines, and Dearborn Capital Group likely faced a maturing loan, a capital call from partners, or a strategic decision to reallocate capital away from office. Selling at a steep discount is not a vote of no confidence in the asset. It is a recognition that the hold period economics no longer pencil. The buyer, by contrast, is acquiring a building that was constructed in 2003, which means it has modern floor plates, good infrastructure, and a location in Chicago's central business district. At $91 per square foot, the basis is below replacement cost by a wide margin. That is the kind of entry that allows a buyer to wait out the market.
This transaction fits a pattern that is becoming more common in 2026. Office sales are happening, but they are not recovery trades. They are repricing trades. The buyers are not institutions seeking core assets. They are private capital, family offices, and specialized investors who can move quickly, underwrite conservatively, and hold without the pressure of quarterly distributions. The sellers are not panicking. They are making a calculated decision to take the loss and move on.
Who benefits from this deal? Kohan and its partners benefit from a low basis that gives them flexibility. The lender on the prior loan benefits because the sale resolves a potential default without a foreclosure. The broader market benefits because a transaction at a cleared price establishes a new comp, which helps other owners and lenders mark their assets to reality. Who is exposed? Owners who bought office in 2015 through 2019 at peak pricing and still hold. Their basis is far above where this trade clears. Lenders with office loans that have not been restructured or extended face the risk that the next valuation will be lower than their underwriting.
The market should watch two things. First, whether Kohan and its partners can lease the building at rents that support the new basis. Second, whether other large office towers in Chicago and similar markets trade at comparable discounts. If they do, the repricing floor is established. If they do not, this deal may be an outlier driven by sponsor-specific factors rather than a market-wide signal.
The deal is not proof that office is back. It is proof that repriced office can trade. The difference matters because it tells owners and lenders that liquidity exists, but only at prices that reflect the current cost of capital and the uncertain path of demand. That is not a recovery. It is a clearing event.