Chicago’s troubled property market, which has seen values plunge by more than 50% in recent years, is starting to draw in investors looking for bargains.

Developer Michael Reschke, who is turning the iconic Thompson Center into Google’s new office together with Quintin Primo, said his firm is in talks to buy several office buildings in the Windy City. The real estate duo has also put forward proposals to re-purpose five buildings in LaSalle Street, once known as the Wall Street of Chicago, as part of a government program to revive the downtown.

Chicago, like many other cities in the US, has struggled to recover from the pandemic, but its problems have been compounded by high-profile defections of large corporations, violent crime and disagreements between the city’s politicians and business community. Vacancy rates in the central business district climbed to a record in the fourth quarter, according to real estate broker Jones Lang LaSalle.

Few office buildings have sold, but those that traded did so at deep discounts. A 41-story tower on 150 North Michigan Avenue exchanged hands this year for about half of the price it sold for more than six years ago.

“Buildings are trading at generational low values,” said Prime Real Estate Group’s Reschke. “I’ve been in the business over 40 years and I’ve never seen such quality office assets being marketed at such low valuations. I think it’s a phenomenal time to invest.”

New deals will help restore confidence in the Loop, as Chicago’s central business district is known, said Michael Edwards, president of the Chicago Loop Alliance. The group representing more than 300 businesses, civic, and cultural institutions met on Thursday to unveil plans to revitalize the area hard hit by the pandemic and riots after the murder of George Floyd.

Reschke and Primo both spoke at the event, where Mayor Brandon Johnson announced a range of initiates to boost the downtown including a Chicago Board of Trade museum. The city also gave almost $1.5 million in grants to six downtown restaurants. The storied Ceres Cafe, which has been grappling with low attendance since CME Group Inc. shut its trading floor, will get $100,800.

“I’m always glad when people are willing to bet on Chicago,” Johnson said. “I am very confident that downtown Chicago will be better, stronger and safer.”

Fewer than five large office buildings sold in Chicago last year, with deals struck at losses ranging from 50% to 90%, according to the Building Owners and Managers Association of Chicago. A five-story property on 100 State Street, where Macy’s Inc. has its Chicago flagship store, traded last month at a discount of about 60%.

“It’s going to get somewhat worse before it gets better, unless the Fed lowers the rate sooner than October,” Edwards said. There are opportunities for developers willing to hold onto buildings for five to 15 years, he said.

Many investors are also focusing on renovating older assets. Just this week JPMorgan Chase & Co. announced a revamp of its downtown Chicago tower for the first time in two decades. First built in 1969, the 60-story building that houses 7,200 of the bank’s employees will get upgrades to the lobby, mezzanine, food hall, outdoor plaza, meeting rooms and work floors, as well as a new fitness center.

Rebuilding confidence in the Loop and prioritizing safety are key pillars of the Loop Alliance’s recently released five-year plan. The group is also working to improve safety in public transport — ridership is improving but remains below pre-pandemic levels — and to fill some 20 vacant storefronts at State Street.

Primo, the founder of Capri Investment Group, remains upbeat about Chicago. Google’s renovation of the Thompson Center and its large employee base at the location will increase demand for retail, restaurants and housing in the Loop. Construction is set to start in March, he said.

“When that happens, Chicago will realize that this is a real project,” he said, adding that the renovation will have an “immense impact on the city and region.”

This article was provided by Bloomberg News.