Crain's Chicago Business
October 14, 1996

Real Estate Review: 1980s player returning to kinder, gentler market
By Betsy Wangensteen

After laying low for four years, Chicago developer Paul Zeller is again betting on Chicago.

The purchase of 211 E. Ontario St., a 200,000-square-foot Class A building near North Michigan Avenue, is just the first step in Mr. Zeller’s plan. He’s got another $65 million - proceeds from the sale of a building in Minneapolis, where he opened an office in 1991 - that he wants to spend in Chicago.

“We’re definitely looking to make an acquisition. The market is back,” says Mr. Zeller.

The president of Zeller Realty Corp. is best known as the developer of 1 N. Franklin St. - one of the last Loop skyscrapers to go up before the market bust of the early 1990s. The building, like many of its peers, was taken over by its lender at the bottom of the market. Vulture investor Sam Zell picked it up for a song.

Mr. Zeller is philosophical. “Everyone always thinks their building will be the last to absorb.”

Still, he says, “Today’s a different game. We don’t need African hardwoods or quarry stone from Brazil - the glitter. Now, people are a little more sensible.”

In keeping with the times, 211 E. Ontario St. - for which Mr. Zeller paid about $7 million - is a small, low-glamour deal.

“It’s a newer building with no asbestos problem,” says Mark Vollbrecht, a Zeller vice president. “The smaller floor plates give elevator I.D. to smaller tenants. And all of the vacancies are on the more desirable upper floors.”

Meanwhile, Mr. Zeller is scouting other buys.

Richard Abraham, who worked with Mr. Zeller at John Buck Co. in the 1980s, described him as “particularly adept in the finance arena.”

He’s an extremely bright and creative guy, and he’s not afraid to try new things,” says Mr. Abraham, now the Chicago-based president of Koll, the Newport Beach, Calif.-based real estate firm.

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