This Week's Chicago Deal Sheet
The life sciences industry already plays an important role in the real estate markets of many U.S. cities, and is on the verge of a rapid expansion.
Cushman & Wakefield forecasts in a new report that the sector, which includes businesses such as cell and gene therapies, artificial intelligence, and ancestry and genetic testing, will grow an average of 37% annually during the next five years.
Cushman & Wakefield expects the growth, fueled in part by capital from the National Institutes of Health, venture capital firms, and corporate research and development departments, will require major expansions in space occupied, especially for new laboratories, healthcare facilities and diagnostic centers.
In Chicago, the life sciences industry is in many ways just starting out. Roughly 3,000 people now work in the sector, but that’s up 54% since 2010, according to Cushman & Wakefield’s Life Sciences 2020, The Future Is Here report. But after a few stagnant years on the development front, new construction is about to begin again.
“Local developers have released plans to create districts focused on biomedical research and life sciences in order to attract more companies, startups and labs, and substantially expand Chicagoland’s life sciences real estate footprint,” the firm said.
The vacancy rate in the region’s life sciences sector, encompassing 5.4M SF, now stands at just 1.3%, the firm added. But Cushman & Wakefield expects new clusters of lab space to form the heart of new developments in Bronzeville, Fulton Market, as well as Sterling Bay’s Lincoln Yards and Related Midwest’s The 78.
NAI Hiffman appointed Jack Brennan as vice president, industrial services. Brennan will assist private and institutional tenants and owners with leasing, sales and development of industrial properties and land in Chicago’s western suburbs. Prior to joining NAI Hiffman, he was an agent with Cawley Chicago.
Paul Nelhart joined Chicago-based Spaces Real Estate’s investment sales division, Spaces Invest, as vice president of commercial real estate. Under Nelhart, the division will expand from multifamily sales and market and sell throughout the Chicago area a range of commercial properties, including office, retail, mixed-use and industrial assets. Nelhart most recently was a director at 5M Real Estate, a brokerage and property management firm serving Chicago and the greater Midwest.
Krusinski Construction Co. promoted Dominic Valvano and added Rhonda Deliman and Suzanne Lawrence to its team. Valvano now has a dual role of project engineer/project coordinator manager, and maintains his project manager role. Deliman joined the company as accounting clerk, and Lawrence joined KCC as a quality control engineer on its operations team.
Kyle Sissell joined Kiser Group as broker, and the firm promoted Justin Turner from analyst to senior associate. Sissell worked as a multifamily broker for a large national firm, and focuses on Indiana’s Lake and Porter counties. Turner joined Kiser Group as an analyst in 2018 as a member of Noah Birk and Aaron Sklar's South Side team, and now manages a team of analysts and the deal flow of the entire group.
Christopher Cable joined Skender as vice president of preconstruction. Cable brings 20 years of experience to the design, construction and manufacturing firm. He joins Skender from Leopardo and previously worked at Walsh and Skanska.
M/I Homes of Chicago expanded its Chicago-area portfolio by acquiring a significant number of land assets owned by the Chicago division of Taylor Morrison. The assets acquired include a total of 228 entitled home sites plus four model homes across the suburbs, including Ashwood Creek, a community of single-family homes in Naperville; High Pointe, a community of ranch villas in Hawthorn Woods; Lincolnshire Trails, a community of two-story townhomes and ranch villas in Lincolnshire; and several others.
Officials from Chicago-based HSA Commercial Real Estate said that Paul Mitchell The School Milwaukee will relocate its campus to a commercial site across from The Mayfair Collection, the firm’s 69-acre mixed-use development in Wauwatosa, Wisconsin. The cosmetology school executed an 8K SF lease at 11415 West Burleigh St., opposite the development’s main entrance. The school will welcome students to the new campus in summer 2020 after it relocates from its existing facility in Pewaukee.
Cushman & Wakefield’s Jonathan Metzl, Jeff Samaras and James Stein represented Help at Home, a provider of in-home and community-based care for older adults and people with disabilities, in a new long-term, 76K SF corporate headquarters lease in the Chicago Loop’s historic Sullivan Center at 1 South State St. The company will move later this year from its current headquarters just to the north at 1 North State St. Designed by Louis Sullivan, the building was known for years as the Carson, Pirie, Scott and Co. Building. Help at Home hired Chicago-based Partners By Design to design the office space. The property’s owner, 601W Cos., was represented by Jamey Dix and Steve Dolz of Telos Group.
Colliers International Chicago’s Michael Marrion represented Hometown America in its nearly 10K SF lease on the 45th floor of Bank of America Tower, the city’s newest trophy office tower, located at 110 North Wacker Drive. The privately held company owns and operates more than 120 residential land lease communities across the U.S. and Australia. It will relocate to Bank of America Tower in May 2021 from 150 North Wacker Drive.
NAI Hiffman’s completed a new industrial lease totaling 63K SF, filling a vacant warehouse located on about 3.5 acres at 4150 Chandler Drive in northwest suburban Hanover Park. Joe Bronson, along with Josh Will and Aimee Goudas, represented the tenant, EFC International, a global supplier of specialty engineered fastener products. The company is doubling its space by relocating its Chicago-area office from about 34K SF in nearby Bloomingdale to the Hanover Park warehouse. The landlord, Centerpoint Properties, was represented by JLL’s Dominic Carbonari and Sam Durkin.
IManage, a provider of work management products, signed an 85K SF lease with Irvine Co. at 71 South Wacker Drive, a 48-story tower in downtown Chicago. IManage will move from 540 West Madison St., and occupy its new space in early 2021. Irvine Co. entered the Chicago market in 2010, when it acquired the 1.5M SF 71 South Wacker Drive, which houses companies such as IBM and the law firm of Mayer Brown LLP. Frank Franzese, Steven Bauer and Aaron Schuster of Cushman & Wakefield represented iManage. Brad Despot, Mark Georgas and Annie Nicolau of JLL represented Irvine Co.
Tech company Rocketmiles continues growing at 641 West Lake St. in Chicago’s West Loop. Colliers International | Chicago’s Corby Marx and Chris Freeman recently completed the company’s second expansion in as many years. The latest lease for 7K SF brings Rocketmiles up to 17K SF at the property. In late 2015, Rocketmiles moved into a nearly 6K SF space, and two years later, expanded its footprint. During lease negotiations, the five-story, 110K SF building, was sold by R2 Cos. and Walton Street Capital to Chicago-based Heitman as part of a three-building portfolio.
Lee & Associates closed three lease transactions in DuPage County. The company’s Chris Nelson represented tenant Bestway Transport on its lease renewal of 80K SF at 1260 Ellis St. in Bensenville, a building owned by Liberty Property Trust. Michael Androwich, along with Nelson, represented Prime Label & Packaging on a long-term lease renewal of 55K SF at 501 North Central Ave. in Wood Dale. The owner, Blackstone Real Estate Industrial Trust, was represented by Jonathan Kohn of Colliers. Finally, Walter Murphy and Sean Austin represented the tenant, Standard Equipment Co., on its long-term lease of a 25K SF truck terminal at 625 Route 83 in Elmhurst. Tim McCahill and Joe Feeney, also with Lee & Associates, represented the owner.
Skender completed interior construction of the 85K SF headquarters for AbelsonTaylor, a Chicago-based health and wellness advertising agency, in the 2.8M SF Old Post Office building. Located on the entire sixth floor of the north building and a portion of the fifth floor of the south building, the space features private offices, open-office workstations, open-collaboration areas, conferencing, two cafés, and photography and editing rooms. Serving as general contractor, Skender worked with HED, Syska Hennessy Group and Cushman & Wakefield to complete the project. Currently, Skender is the contractor for nearly 600K SF of office space being constructed at the building, including projects for Walgreens and PepsiCo.
THIS AND THAT
Luxury Living Chicago Realty analyzed data from 1,708 renters across the company’s 2019 portfolio, and found top industries of employment were financial services, healthcare, management consulting, technology, and marketing and advertising. The average income of a male renter was $124K, and the average income of a female renter was $86K. Of the 1,708 renters, 39.3% were moving into Chicago. New York, Michigan, California, Texas and Indiana were the top five states renters were relocating from.
One Bennett Park, developer Related Midwest’s recently completed, 70-story luxury-residential tower in Streeterville, was named the 2019 Residential Project of the Year by the Construction Industry Service Corp., and honored at the group’s annual meeting held on Friday, Feb. 7. One Bennett Park is the first and only residential building in Chicago designed by Robert A.M. Stern Architects, and an adjacent 2-acre park was designed by Michael Van Valkenburgh Associates.