Home News Chicago investor buying O’Hare office building

Chicago investor buying O’Hare office building

by admin
0 comment

The deal, if complete, would be BA’s fourth purchase of a Chicago suburban office in the past two years and would be a win-win for most real estate investors at a time when remote work has dampened office demand and increased vacancies in suburban offices. did not gamble. best ever. The company, led by Chicago investors Larry Elbaum and Jeff Bernstein, All together paid out over $80 million From September 2020 onwards, it covers office properties in Downers Grove, Deerfield and Northbrook.

The Rosemont deal came despite rising interest rates, making the cost of capital yet another challenge for buyers. BA He is looking to buy an 11 story building. The building was occupied by a series of major bank tenants, but he is now one-third vacant. This is above the 22% average vacancy rate for office buildings in the O’Hare submarket.

The company is betting that it can lease available space in the 21-year-old building. according to the flyer From Cushman & Wakefield, the broker who sold the property on behalf of New York-based Blackstone.

A spokesman for BA declined to comment and a spokesman for Blackstone did not respond to a request for comment.

The challenge of leasing up seems daunting considering that suburban Chicago office buildings have collectively lost about 2.9 million square feet of tenants since early 2020. This is largely a result of companies adopting remote work and reducing space. Landlords have had to pay unprecedented levels of concessions, such as cash, to build the space in order to get the company to sign the long-term lease.

But data from brokerage Jones Lang LaSalle show recent signs of a recovery, with suburban office tenants outstripping movers in the second quarter for the first time since 2019. It also works in favor of BA. Top-notch quality, or Class A buildings, like Pointe O’Hare, capture the majority of leasing activity as businesses seek spaces that help employees come to work rather than work from home doing.

Since acquiring Pointe O’Hare in 2015 as part of a $3.3 billion portfolio acquisition from GE Capital Real Estate, Blackstone has invested $8.5 million in the building to include occupied office suites, an on-site fitness center, Conference center with 988 parking spaces.

Blackstone also backfilled some of the large vacancies left by Fifth Third Bank as part of its 2019 acquisition of MB Financial. MB had previously taken over that office block through its 2014 acquisition of Cole. Taylor Bank.

The building’s largest tenant is a division of the Airline Pilots Association, which represents United Airlines pilots. More than two-thirds of his 18 tenants on the property hail from the financial, insurance and real estate services sectors, according to Cushman’s flyer.

Ventures led by Elbaum and Bernstein, co-founders of brokerage firm Bradford Allen Realty Services, paid out nearly $23 million last year. Eden’s Corporate Center Located at 630-650 Dundee Road, Northbrook. These are after he purchased an office building at 570 Lake Cook Road in Deerfield for $16 million in late 2020. Finley Point Office Building $44 million at Downers Grove.

You may also like