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Formerly Run-Down Evanston Office Tower Now For Sale

1007 Church Street, Evanston, IL

Keep an eye on Evanston, where the office building sector is showing signs of activity. Hot on the heels of Steelbridge Capital's $18M acquisition of 500 Davis St comes word that another formerly distressed office building is on the market.

A JV of The Farbman Group and Lubert-Adler Partners has placed 1007 Church St up for sale. The JV paid $9.6M for the defaulted loan on the Helmut Jahn-designed building two years ago, according to Crain's. It was previously owned under a tenant-in-common partnership, TIC Group, which paid $27M for the asset in 2007. As cash flow evaporated during the real estate bust, the group was hit with a foreclosure lawsuit.

The building had a 49% vacancy rate when the Farbman/Lubert-Adler JV assumed control; it's now at 21% and the JV upgraded lobby and common area amenities. HFF, which is courting bidders for the 156k SF building, says there are several upsides to a deal. Rents are well below market value, which means a new owner has the ability to significantly increase revenue. An adjacent parking lot can be redeveloped to add another 149k SF of office space. Bids on the property could reach $29M, a hefty ROI for the Farbman/Lubert-Adler JV. [Crain's]