This Week’s Chicago Deals Sheet (March 3, 2021)
The direct vacancy rate for major office buildings in Chicago’s central business district increased 1.9 percentage points to 10.6% since the fourth quarter of 2020, according to a report by MB Real Estate. Each quarter, the company calculates the vacancy rate for the 30 newest CBD buildings over 300,000 square feet. The list contains a large portion of the most desirable downtown spaces and serves as an indicator of market conditions.
The total vacancy rate for the top 30, including the areas available for subletting, is 13.6%.
Courtesy of MB Immobilier
Direct vacancy rate in Chicago’s top 30 CBD properties and rates in the entire CBD
MB Real Estate added two recently completed buildings to its list this quarter: Bank of America Tower, the SF 1.5M development of Howard Hughes Corp. and Riverside Investment & Development at 110 North Wacker Drive, and Shapack Partners’ 642K SF building at 167 North Green St. in the Fulton Market area. The additions increased the number of direct vacancies on the list to 616,000 square feet and replaced 1 North Franklin St. and 500 West Monroe St., two well-occupied buildings that had only 92,000 feet between them. squares of direct vacant space. According to MB Real Estate, this change caused most of the increase in the number of direct vacancies.
The overall direct vacancy rate for CBD increased 79 basis points to 14.2% at the end of the fourth quarter, leaving a gap of 3.7 percentage points between all of CBD and its main properties. The total CBD vacancy rate, including available sublet areas, was 17.8% at the end of Q4.
Only one major transaction has been signed in one of the top 30 buildings since MB Real Estate’s last report. BenchPrep leased 28K SF at 111 South Wacker Drive. None of these properties were sold in the fourth quarter.
“The lack of rental and sales activity is indicative of the continuing uncertainty in the market due to the COVID-19 pandemic,” according to the MB Real Estate report.
Black Bear Capital Partners has expanded its Chicago office by adding real estate finance advisor Suraj Desai, who is joining as senior managing director. The new Chicago office includes Eric Trombly, Matthew Stearns, Raymond Zanca, Scott Modelski, Zach Fitzgerald and Sam Koziol. Desai will research and execute structured debt and equity transactions with a focus on hospitality. Desai previously held executive positions at Chicago-based Alpha Capital CRE and Mag Mile Capital.
Ann Lyon, Jeff Folker and Kim Campbell from Lyon Folker Campbell Partners have joined @properties. The team comes to @properties of Berkshire Hathaway HomeServices Chicago. Lyon Folker Campbell Partners was Lake Forest’s best team in 2020, with nearly $ 60 million in closed revenue, according to data from BrokerMetrics LLC.
@properties has also appointed @properties agent Tom Downing vice president of brokerage services and management broker for the company’s Winnetka office.
Interra Realty has promoted Max Grossman from Associate Broker to Director. Since joining Interra in June 2018, Grossman has negotiated or helped complete more than $ 125 million in mid-market multi-family transactions. Grossman’s recent deals include the $ 1 million sale of 4040 South Prairie Ave. , two eight-unit apartment buildings in the Bronzeville neighborhood of Chicago.
Michael Marrion joined Cresa Chicago as senior vice president of the company’s downtown tenant advocacy group. Marrion will focus on business development and customer service, helping office tenants with long term strategies. Most recently, he was Senior Vice President at Colliers International Chicago. Two new advisers, Sterling Pompey and Jack Brown, join Marrion at Cresa. Gregg Witt joined the firm in December.
Lee & Associates of Illinois welcomed Grant Bollman to its office team. In his new position, Bollman will focus on the I-88 / East-West corridor and the I-90 Northwest submarket. He will specialize in the representation and investment of office tenants, the acquisition and disposal of office buildings. Prior to joining Lee & Associates, Bollman worked as a senior partner at Cawley Chicago.
The BOMA / Chicago Foundation announced new and renewed members of its board of directors. The new officers are Lance Knez of Hines as president, Bridgette Battle of LJ Sheridan as vice-president and Joseph Sherman of the Chicago Symphony Orchestra as treasurer. New directors elected to the board are Graham Grady of Taft Stettinius & Hollister LLP, Derrick Johnson of Zeller and Blanca Lopez of JLL. Directors reappointed to the Board are TJ Brookover of AmTrust Realty, Susan Hammer of JLL, Rebecca Miles of M&J Wilkow, David Myles of MB Real Estate, Paul Rades of CBRE, Katherine Scott of Parkside Realty and Robert Six of Zeller.
A Florida-based limited liability company purchased a 10,000 square foot net leased CVS property at 1400 East Roosevelt Road in the western suburbs of Wheaton for $ 7.2 million. Matt Emerick, Austin Weisenbeck and Sean Sharko of Marcus & Millichap’s Chicago office in Oak Brook had the exclusive list to market the property on behalf of the seller, a Chicago-based private investor. The buyer was secured and represented by Alex Zylberglait and Ruy Guedes Teixeira of the Miami office of Marcus & Millichap.
Chicago-based Dayton Street Partners acquired from Southfield Corp. a 7.81 acre site at 2217 South Loomis St. in Chicago. The site consists of several buildings totaling 66,000 square feet, including a separate office / showroom and weighbridge. The surrounding neighborhood is home to LTL carriers, trucking companies, distributors, and manufacturers, including Amazon, FedEx, and Lineage Logistics. David Lane of Burr and Temkin, along with Ed Wabick, Terry Lynch and Mark Hale of Paine Wetzel, will lead the marketing and rental efforts.
An undisclosed e-commerce tenant signed a 10-year lease to occupy the 203,000 square foot building located at 16750 Vincennes Ave. in the southern suburbs of South Holland. Michael Conway and Gavin Stainthorpe of JLL represented the tenant. The owner, The Rosdev Group, was represented by Cushman & Wakefield. The building, formerly occupied by XPO Logistics, gives the tenant immediate access to the Chicago Intermodal Terminal of Canadian National.
Courtesy of Worn Jerabek Wiltse Architects, PC
9401 South Stony Island Ave.
The Chicago office of mortgage banking firm Merchants Capital has secured financing for the development of Montclare Senior Residences at 9401 South Stony Island Ave. in Calumet Heights, Chicago’s historic Pill Hill neighborhood. Funding was secured through the US Department of Housing and Urban Development’s 221 (d) (4) program. The project was carried out in partnership with MR Properties and Patti Ann Charitable Services. It serves people 62 and over in 134 one- and two-bedroom units, with 104 units reserved for extremely low, very low and low income households earning no more than 60% of the region’s median income.
JLL Capital Markets arranged a $ 153 million refinancing for 123 North Wacker Drive, a recently repositioned 550,000 square foot office tower in Chicago’s West Loop. JLL worked on behalf of the borrower, LaSalle Investment Management’s Income & Growth Fund Series, to secure the five-year variable rate bridge loan. The 33-story office tower has undergone capital improvements of over $ 33 million in recent years. The JLL team was led by Keith Largay and Lucas Borges.
Courtesy of Englewood Construction
Windy City Cannabis in Carpentersville, Illinois
CONSTRUCTION AND LAYOUT
Englewood Construction, based in Lemont, Ill., Was approached by the Herbal Care Center to build an 8K SF Recreational Dispensary at 222 South Halsted St. in the Greektown neighborhood of Chicago. Designed by Chicago-based architect Studio ARQ, the location is the adaptive reuse of an old restaurant. Construction will be completed this spring. Englewood has already completed two Chicago area dispensaries this year for Windy City Cannabis and is currently building Windy City Cannabis locations in Highwood, Carpentersville and Macomb. Camburas Theodore, based in Des Plaines, Ill., Was the project architect for these three 5K SF locations, all of which are slated for completion in March.
JC Anderson completed office construction at 200 West Adams St. in Chicago for Midwest-based managed services provider Ascend Technologies LLC. Chicago-based Ascend has relocated from 222 West Adams St. and employs over 100 US-based technical professionals. JC Anderson’s construction team was led by John Angelovich, Kayla Mckinney and Mark Zawadka. GARNETT provided architectural services.
THIS AND THAT
Frontline Real Estate Partners, Carr Realty Advisors and Stillwater Advisory Group, all Chicago-based companies, have formed a new joint venture, Frontline Real Estate Partners – Shopping Mall and Lifestyle Division. The joint venture will provide its clients with receivership, property and asset management, rental and disposal services for shopping malls and lifestyle centers.
The Boulder Group has released its Net Lease Auto report. In the fourth quarter, national asking rates in the single-tenant auto sector declined to 5.89%, according to the report. This represents a decrease of 48 basis points from the previous year. The automotive sector, for the purpose of this report, is made up of various automotive-related tenants in the parts, service and collision sectors.