This Week's Chicago Deal Sheet
Office availability continued to climb in the last three months of 2020, rising another 150 basis points to close the year at 20.1%, according to a new report by Savills. More than half of all new available space was located in the West Loop, where availability increased 250 basis points to 18.8%.
West Loop tenants also continued to put more space up for sublease. The amount of new sublease space in the submarket increased by 550K SF in Q4, the firm found. And the total amount of sublease product available in downtown Chicago doubled in the past year to 5.6M SF.
Despite the increase in vacancy, asking rents remained steady at $40.60 per SF, according to Savills.
“Looking ahead at 2021, the medium to long-term outlook for tenants remains bright,” a Savills spokesperson said in a written statement. “Those in the financial position to make decisions will have the upper hand and can expect ample options, flexibility, and generous concessions, while simultaneously being able to conserve capital. Though face rental rates have remained steady, increased pressure may cause them to decline over the next few months.”
Avison Young hired J.C. Griffin as a senior broker in the firm’s downtown Chicago office. He will focus on investment management transactions and conducting valuation and advisory services within the firm’s development services and capital markets groups. Griffin will also expand the firm’s focus on the public sector. Before joining Avison Young, Griffin started his real estate career at @properties.
The firm also added Samantha Fonda as the operations manager for the Chicago region.
Galina Breslav joined JLL as director of national accounts for the firm’s office property management group. Breslav has more than 15 years of experience in commercial real estate and joined JLL from Nuveen Real Estate, the asset management division of TIAA, where she was a senior director.
First Hospitality appointed Jordan Bernstein to be vice president of business development. Bernstein brings more than 15 years of hospitality experience to his new role and will help expand First Hospitality’s portfolio of third-party-managed hotels. Before joining the company, Bernstein was a director of InterContinental Hotels Group.
Alex Gordon joined Bradford Allen’s agency leasing practice. Prior to joining Bradford Allen, Gordon was a leasing agent at Golub & Co., where he handled the leasing of 300 South Wacker Drive, 444 North Michigan Ave., 111 West Washington Blvd. and several others.
Lee & Associates promoted Sean Austin and Ryan Earley to senior vice presidents. Austin has been with Lee & Associates since 2018 and focuses on industrial property across several urban/infill submarkets in the city of Chicago and the O'Hare submarket. Earley joined the firm in 2016. He concentrates on Chicagoland’s I-55 and I-80 submarkets.
Lee & Associates also promoted Caroline Dell to senior associate. The industrial product specialist joined the firm in 2016 and focuses on the I-55 submarket.
Walton Street Capital sold Town Square, a 138K SF regional shopping center about 45 minutes south of downtown Chicago in Schererville, Indiana. Albanese Cormier was the buyer, and a JLL team led by Clinton Mitchell and Amy Sands marketed the property. Bed Bath & Beyond and T.J. Maxx anchor Town Square, which was completed in 2001.
Remedy Medical Properties bought from DIR Development a multi-tenant medical office center at 11560-11630 South Kedzie Ave. in southwest suburban Merrionette Park. Drew Neems and Theron May with Imperial Realty represented the seller. Remedy’s Joe Magliochetti and Jack Gavin ran the deal for Remedy. Advocate Medical Group and Fresenius Kidney Care anchor the 100K SF property.
Affiliates of Milwaukee, Wisconsin-based Phoenix Investors acquired from LegacyTexas Bank a 323K SF industrial building at 1818 Elmwood Road in Rockford, Illinois. The bank had foreclosed on the 14-acre property, which is 75% leased. It is located in Northrock Industrial Park on the city's northwest tip. Al Caruana at Cushman & Wakefield brokered the transaction.
Glen Una Management purchased a fully leased, multi-tenant, 456K SF industrial building at 1400 North 25th Ave. in suburban Melrose Park. JLL marketed the 15-acre property on behalf of seller Baker Development Corp., which renovated it in 2019. The tenant roster includes 15 national and regional companies in the warehouse, distribution, food production, showroom, will-call, and sports and entertainment sectors. The JLL team was led by Ed Halaburt, Robin Stolberg and John Huguenard.
Venture One Real Estate, through its acquisition fund VK Industrial V LP, a partnership between Venture One and Kovitz Investment Group, purchased a 50K SF, two-building industrial portfolio at 2450 Pan Am Blvd. and 2690 American Lane in Elk Grove Village. The portfolio is fully leased to eight tenants. Both buildings were constructed in 1968. Daniel Vanchieri and John McDermott of SVN Commercial represented the seller. Transwestern’s Justin Lerner, Joe Karmin and Ross Lehrman represented Venture One and will market the properties.
Teel Plastics completed 389K SF of real estate transactions in Baraboo, Wisconsin. It signed a new 180K SF lease at 1300 Sauk Ave. and completed a 209K SF, two-property sale-leaseback of its 1060 Teel Court and 426 Hitchcock St. Newmark’s Andrew Sandquist, J.C. Asensio, Briggs Goldberg, Travis Tiede and Adam Matson represented Teel in both transactions. LCN Capital acquired the properties. Teel creates roughly 120 million coronavirus testing swab sticks every month.
JLL Capital Markets arranged $63.7M in financing for a joint venture equity partnership's $100M acquisition of a 372K SF, net-leased research and development facility, along with an adjacent 118K SF corporate office, in the suburban Milwaukee community of Menomonee Falls. The firm worked on behalf of Capital Trust Group to arrange its partnership with Bascom Group. JLL placed the CMBS loan with Citigroup. The facility was completed in July as a build-to-suit for Leonardo DRS. The JLL team was led by London-based Claudio Sgobba and Chicago-based Christopher Knight.
CONSTRUCTION AND DEVELOPMENT
James McHugh Construction Co. completed the renovation of Four Seasons Hotel Chicago, located on floors 30-46 of 900 North Michigan. The project, which began in November 2019, was the hotel’s largest renovation since opening in 1989 and included 55K SF of public space as well as 347 suites. Designed by architecture and design firm Rottet Studio, the hotel now features a social lounge that allows socially distant gatherings. McHugh also worked with Chicago-based commercial stone subcontractor GI Stone, which fabricated and installed nearly 20K SF of stone and restored parts of the hotel’s original stonework.
After a three-year search, Howard Brown Health, a Chicago-based lesbian, gay, bisexual, transgender and queer health care organization, selected Inland National Development Co. to develop a new health care center at 3501 North Halsted St. in Chicago’s Northalsted neighborhood, formerly known as Boystown. Howard Brown Health plans a five-story, 71K SF facility that will offer medical and dental clinics, a pharmacy, behavioral health, administrative offices and ground-floor retail.
Northbrook, Illinois-based MZ Capital Partners began pre-leasing for the 112-unit Vantage Naperville Apartments at 1350 East Ogden in west suburban Naperville, which it plans to complete in April.