January 13, 2015

Meet Randy Blankenhorn,
the New Guv's Surprise Pick for IDOT

Gov. Rauner was sworn in yesterday, and we guess his nominee for IDOT secretary shouldn't be a surprise given his anti “business as usual” stance. Meet Randy Blankenhorn, head of the Chicago Metropolitan Agency for Planning (CMAP) since '06, and before that a 22-year IDOT vet.

Steven Vance/Flickr

He's pro Ashland Bus Rapid Transit (BRT): Millennial and subsequent job migration to urban centers has been well-documented in recent years, and BRT (in center-running bus-only lanes) will more effectively move them from home to work and back, he's said (making Ashland more attractive for TOD). But companies in the Kinzie Industrial Corridor can't get on board, saying the plan could derail a steady flow of supplies and customers. Also, Milwaukee's already taken the name “Hipster Highway,” with all its bikes, what would we call this one?

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Randy may be pro BRT but he's equally anti former Gov. Quinn's proposed $1.5B Illiana Expressway, a PPP that would link I-55 with I-65 in Indiana (and he's said won't generate enough revenue to be profitable any time soon). Illiana supporters say it's a no-brainer to improve intermodal access and the efficiency of Chicago's industrial ecosystem, but it may be biting off more than Illinois can chew given state debt, something the governor's promised to aggressively address.

You tell us, what would the Ashland BRT and/or Illiana mean for your development plans? marissa.oberlander@bisnow.com

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Suburbs Beat CBD in 2014

Ready for a shocker? Suburban office absorbed more space than downtown Chicago in 2014, according to NAI Hiffman. (That's nearly 1.9M SF of space absorbed compared to 44k SF in the CBD.) Suburban vacancy, especially across older product, is still high at 18.6%, but it's a huge improvement from the ‘burbs' peak at 23.7% four years back.

The suburbs' positive trending fundamentals are thanks to less ownership-focused and incredibly transit-oriented Millennialsaccording to HFF managing director Chris Carroll (pictured). And they're not short on investors looking for the right turnaround play. Boston-based The Davis Cos just bought its sixth suburban office property since entering the market at bottom in 2010.

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This Week's Chicago Deal Sheet, Part II

FINANCING

HFF managing director Daniel Kaufman and real estate analyst James Conley arranged a $34M refi for the Shops at Kingsbury Square, a 100% leased Class-A retail center (above) anchored by a national flagship Whole Foods at 1550 N Kingsbury St in Lincoln Park. Working on behalf of CRM Properties Group, HFF placed the 15-year, fixed-rate loan with State Farm Life Insurance Co. HFF will also service the loan.

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Aries Capital VP Eric Jones completed a $2.4M Fannie Mae loan for the apartment building (five units with ground-level retail) at 854 W Armitage in Lincoln Park. The 10-year, non-recourse loan features a 4.23% interest rate and a 30-year amortization, representing 115% of the total cost basis. The group of borrowers includes Douglas Crocker II, former CEO of Equity Residential.

CONSTRUCTION & DEVELOPMENT

A JV between Boston-based Cabot Properties and Chicago-based Seefried Industrial Properties closed late last month on the purchase of an 11.2-acre site at 5600-5700 W Jarvis Ave in Niles. The JV will demolish two buildings before starting construction on a new 217k SF spec warehouse. It will be the third new industrial development in the North Cook submarket in the last decade. JLL's Steve Trapp, Kurt Sarbaugh and Robin Stolberg repped the JV in the acquisition and are marketing the new development. The property has been approved for 6b Cook County property tax status by the Village of Niles.

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HSA PrimeCare completed the development of a 30k SF business center (above) at Silver Cross Hospital in New Lenox. On the east side of campus, the two story administrative building (housing business offices, hospital support departments, EMS training and IT) was completed within a five-month period. With this completion, HSA PrimeCare has developed three medical buildings on the Silver Cross campus totaling more than 100k SF.

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Geneva's 25N Coworking space, founded by Mara Hauser, is set to open in late January at 25 N Third St. St Charles resident Meagan Schoenrock, a graduate of Northern Illinois University with a background in graphic design, will serve as the space's community manager.

EXECUTIVE MOVES

Avison Young hired Mike Hull as principal, specializing in office tenant rep. He was most recently an SVP at MB Real Estate. The 25-year industry vet has completed more than $3B in transactions for clients including AT&T, Komatsu and Motorola. In 2001, he founded The Mike Hull Co, a local corporate services real estate firm. Mike has a BA from Loyola.

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JLL tapped Sundee Wislow to lead the firm's development, acquisition and roll-out of sustainability offerings for real estate investors and corporate owners. Sundee previously founded the sustainability practice at US Equities. She was one of the first real estate professionals to offer sustainability services in South America and an early leader in designing portfolio-wide sustainability programs for investor-owned assets. Sundee holds an MBA from Kellogg and graduated cum laude from Bates College.

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Inland Real Estate Brokerage appointed Richard Artman to president and managing broker, leading Inland's newest brokerage office location in Yorkville. Richard has been with Inland since 1985 and has held positions spanning from property management to land development and real estate brokerage. Since 2003, he's completed over $75M in sales. Inland Real Estate Brokerage also promoted Heather Devermann to VP and senior executive broker, assisting in overseeing the new Yorkville office. In the business for 17 years, Heather received her undergrad degree from St Olaf College and her graduate degree from the University of Georgia.

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FH Paschen Wins $74.8M
CTA Job

The City just awarded “L” veteran FH Paschen a $74.8M job building the new Washington/Wabash station, and work is slated to start this spring, the Redeye reports. Delayed for a couple years now, the federally funded project will combine both the Randolph and Madison/Wabash stops, with updates for bikes and wheelchair accessibility.

With neighboring residential conversions like the top floors of recently sold 55 E Monroe reducing inventory, demand is up for East Loop, amenity-rich office buildings with lower rents then the trendy West Loop, says GlenStar Properties' Rand Diamond. So it makes sense the mayor's office predicts more than 13,000 riders each weekday, making the station the CTA's fifth busiest when completed next year.

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Real Estate Selfie:
Luxury Living Chicago Realty

Luxury Living Chicago Realty managing broker Aaron Galvin tells us his team celebrated a successful 2014 with an incentive trip to Vegas at the end of December. (That success: 575 luxury apartments rented with an average rental price of $2,565, along with $4.5M in condo sales.) The four-day trip included fine dining and a competitive casino crawl, Aaron says. The stops were announced with clues and the team (given $50 each to play with) had to guess the destination and game they'd be playing. The player with the largest winnings won the others' profits. (We can only imagine how competitive brokers would get with a contest like this one.)

Send your selfies to marissa.oberlander@bisnow.com!

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Don't Miss Our Creative Office Summit Jan. 28!

Companies (led by tech firms) are pining for open space and a “Google culture,” but they're realizing you can't just knock down all the walls and hope that will happen. That's why we're exploring the process, step by step, at Bisnow's Chicago Creative Office Summit, Jan. 28 at Willis Tower, beginning at 7am. Our all-star lineup includes 1871 CEO Howard Tullman, South Street Capital co-founder Matt Garrison and CBRE EVP Brad Serot. Pictured: The special photo wall at CBRE's new digs, 321 N Clark, where employees can showcase their personality. Don't wait, get your event tickets today so you can prepare for your office makeover tomorrow!

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Tell Us

Seeking book recommendations for our new book club. Tell marissa.oberlander@bisnow.com the best thing you read recently!