Canadian Firm Makes First Chicago Office Acquisition
Long Wharf Real Estate Partners is cashing out of a two-building office portfolio in the northwest suburbs, and the sale price is another indication northwest suburban office real estate is lagging behind stronger-performing submarkets in the Chicago suburbs.
Balfour Pacific Capital is paying $78.3M for One Pierce Place and 500 Park Blvd. in Itasca, Crain's Chicago Business reports. That is slightly more than the $74M Long Wharf paid for the two properties in 2011 and far below the $98M bids expected for the buildings. Balfour Managing Partner Mark Scott said the assets are perfect for the Canadian firm's first Chicago acquisitions because Class-A assets are still in demand, even in the northwest suburbs, and he believes Itasca's proximity to the O'Hare submarket — arguably the suburbs' strongest-performing submarket — will translate to demand from tenants in nearby submarkets.
But Balfour will have its work cut out for it. The overall vacancy rate for northwest suburban office real estate ended Q3 at 29.3%, and companies are still either moving to downtown or consolidating their office footprints in the burbs.