Chicago Office: Mediocre; The Deal Sheet
| After many grueling hours of marketing research, Reis analyst Brad Doremus developed the perfect tagline for the office market in Chicago. “Chicago Office: Not very pretty, but not as ugly as everyone else.” (No, Brad doesn't teach self-esteem classes on the side. Hard to believe, right?) |
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| Maybe it doesn’t exactly flow off the tongue, but effective rents in the Chicago office market were flat during Q3 2010, stemming six consecutive quarters of rent decreases for the metro while all US metros in aggregate recorded the ninth consecutive quarter of effective rent declines. The Chicago office market held up much better than the nation as a whole during the throes of the recent economic turmoil. Effective rent in Chicago declined a respectable 2.2% between Q4 2008 and Q3 2009 relative to the 7.1% fall exhibited nationwide. However, recent quarters (aside from Q3 2010) have shown a reverse in this trend as Chicago effective rent fell 2.3% vs. a 1.6% decline for the country. Chicago investors hope the most recent quarter’s out-performance is a sign of things to come. They may be vindicated in the longer term; although Chicago’s effective rent growth is expected to lag the US in total over the next year, growth should top the national average beginning in 2012. |
| Management News CB Richard Ellis' Natalie Koziol is the new senior real estate manger for Health Care Services Corp. at 300 E. Randolph. The 1.8M SF building added 860k SF last year when HCSC built an additional 25 stories on top of the existing building. CB Richard Ellis’ property management group’s portfolio in the Chicago area is now more than 45M SF. *** Bridge Development Partners' 555 Aptakisic Dr in Lincolnshire has been awarded LEED Gold status. Colliers International’s Steven Kling and Peter Kelly are leasing agents for the property. Architectural services were provided by Archideas and the general contractor was Premier Design+Build Group. The 162k SF spec office building has a storm water system design that minimizes erosion, optimized energy performance and indoor air quality 30% higher than ASHRAE standards. Executive Moves *** Lou Berchicci has joined Jones Lang LaSalle’s industrial project & development services group where he will be responsible for managing large-scale build-to-suit projects for the firm’s industrial clients. The 20-year industry vet was previously with Providence Logistics. *** Loren Guzik was promoted to senior director from director at Cushman & Wakefield. He specializes in tenant representation within C&W’s office brokerage division. Clients include law firms, professional services firms, insurance agencies, construction firms, healthcare companies and financial services firms. ***
*** McShane Construction Co completed a 20k SF office assignment on behalf of Ogletree, Deakins, Nash, Smoak & Stewart at 155 North Wacker Dr, Suite 4300. The legal services suite includes 36 private offices, 12 soft offices, three conference rooms, an extensive law library and a kitchen/breakroom. ASD Architects provided the architectural services. *** Chicago Lakeside Development, a venture of McCaffery Interests and United States Steel Corp, opened its 2k SF marketing center in the only remaining structure between 79th and 91st along the lakeshore. The 1917 structure has been updated to show the development's vision. When completed over a span of 30 years, the development will include 13,575 new homes, 17.5B SF of retail and other commercial space, a new high school, and a 1,500-slip marina. Construction is expected in a minimum of six distinct phases. The center, which was developed with LEED-CI green building criteria, was designed by Antunovich Associates. *** J.C. Anderson completed construction on an 18k SF penthouse office renovation for LSV Asset Management at 155 N. Wacker. The penthouse features 10’ clear heights which allowed for the use of ceilings with custom lighting. The newly constructed walls have high-end tiles, stone and glass. J.C. Anderson's Thomas Raveret led the construction team including project manager Joe Maguire and project superintendent Steve Perry. Hydzik Schade Associates provided the architectural services. Sales News *** Barrymore LLC purchased a 105k SF industrial building at 2600 Washington Blvd in Bellwood from DeNovo Rockford/Bellwood. Grubb & Ellis' Ryan Kehoe, Peter Block and Anne Arnold represented the seller. *** CB Richard Ellis’ Keith Puritz, Brett Kroner, Ryan Bain and Zach Graham represented Glentronics in the sale of 640 Heathrow Dr in Lincolnshire. Dynomax purchased the 40k SF industrial building for an undisclosed price. Asking price was $2.7M. Darwin Realty's Patrick Shannon represented the purchaser. *** Permatron Corp purchased a 35k SF industrial building at 2020 Touhy Ave in Elk Grove from the Hessler Family. Grubb & Ellis'Brian Carroll and Sam Durkin represented the buyer. *** Millennium Properties' Daniel Hyman and Susan Silver sold 5940 Touhy Ave in Niles. The three-story 34k SF office building was bought by Imperial Realty for an undisclosed amount from a consortium of banks situated in the Midwest. Susan and Daniel represented the buyer and sellers respectively, while Garfield & Merel's Greg McCormick served as counsel for sellers. *** Millennium Properties sold a partially completed townhome development in Willowbrook on behalf of Private Bank. The sale consisted of seven partially completed units and one model unit. Each unit is approximately 2,500 SF and consists of three bedrooms and two and a half bathrooms. The homes sold for a total of $1.2M to Ben Pecoraro. Private Bank was represented by Millennium Properties' Greg Block. The buyer was represented by Quick Time Realty's Bozena Ryt. *** APA 73 leased 70k SF of industrial space at 1106 Ellis St. in Bensenville from Mobile Equipment Warehousing Co. Grubb & Ellis' Brian Carroll and Matthew Mulvihill facilitated the transaction on behalf of both parties. ***
WEG Electric leased 50k SF of industrial space at 2325 North Ave, in Melrose Park from TIAA-CREF. Grubb & Ellis' Brian Carroll represented the tenant. Brian and Grubb & Ellis' Ryan Kehoe and Matt Mulvihill represented the lessor. ***
*** Atlas SN Transportation leased 26k SF of industrial space at 1901 Pratt Blvd in Elk Grove from Hollander Holdings. Grubb & Ellis' Brian Carroll and Sam Durkin facilitated the transaction on behalf of both parties. ***
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