GEM Realty Entering Tight Evanston Office Market
GEM Realty agreed to buy a majority interest in Orrington Plaza, the tallest office building in Evanston, in a deal believed to be worth nearly $91M. A joint venture of Investcorp and Golub bought the property for $61.1M in October 2013, financed with a $42.5M loan from BMO Harris Bank, according to Cook County property records.
Investcorp is cashing out, while Golub will retain a stake in the 20-story building and continue to operate the building. GEM is buying a building that is fully occupied, with an attached 31K SF two-story retail pavilion. Investcorp and Golub were seeking bids of up to $87M for the building, and signed 15 leases at rents ranging from $22/SF to $26/SF to boost the building's value without adding amenities.
Evanston is one of the Chicago area's strongest suburban office submarkets. It ended 2017 with a 4.6% vacancy rate, is supply-constrained and benefits from great access to public transportation and an urban environment. Orrington Plaza is just the latest major suburban office transaction. Angelo Gordon agreed to a $148M purchase of President's Plaza near O'Hare. Blackstone Group agreed to sell Westbrook Corporate center to Group RMC for $132M.