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February 16, 2021

This Week's Chicago Deal Sheet

[Digital Summit] Compass Datacenters, Digital Realty Trust & NTT Global Data Centers Americas talk DICE Construction & Development Feb. 18

Bridge Development Partners acquired two properties near O’Hare International Airport at 9513 River St. and 9555 Irving Park Road in Schiller Park. It plans to demolish the existing structures and replace each with a small Class-A industrial facility.

The developer agreed to buy the buildings as part of a long-term lease transaction with Duravant, a Downers Grove, Illinois-based manufacturer. Duravant will vacate the two Schiller Park properties and move its operations into 265K SF at Bridge Development Partners’ Bridge Point Wood Dale facility in nearby Wood Dale.   

This Week's Chicago Deal Sheet

“Not only is O’Hare a prime location for both labor and highway access, but it’s tremendously undersupplied when it comes to Class-A product,” Bridge partner Nick Siegel said in a press release. “Assets of this size are incredibly rare, and smaller offerings like this will allow potential tenants such as…

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Inside How A Government-Seized Commercial Building Gets Sold

When Xiao Hua “Edward” Gong was arrested and tried for running a pyramid scheme and laundering money, the U.S. government seized his American properties. Among the millions of square feet are some eye-catching commercial real estate, like a huge Detroit-area hotel, an even-bigger former factory and a majority share of a historic office building in Downtown Chicago.

Those assets are going on the market now, and the seller is as reliable as they come.

“With government-owned assets, the properties are definitely going to sell,” Real Look Vice President of National Development Justin Ochs said. “Inspection and closing windows are relatively short, so you know you have a seller in the marketplace ready, willing and able to sell the property.”

That may catch the eyes of investment capital that has built up dry powder as U.S. investment volume shrank by 32% last year. But if investors approach forfeited properties expecting a distressed asset sale, they will find something completely different.

Inside How A Government-Seized Commercial Building Gets Sold

While states and cities each have their own procedures for taking properties through forfeiture, properties involved in any federal cases are turned over to the U.S. Marshals Service. The agency’s two main objectives with regard to such assets are to liquidate them to repay victims of the associated crime and to…

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Marriott CEO Arne Sorenson Dies At 62

Marriott CEO Arne Sorenson Dies At 62  

Marriott International CEO Arne Sorenson has died after a nearly two-year battle with pancreatic cancer. He was 62. Sorenson, the third CEO in Marriott's history and the first from outside the Marriott family, passed away unexpectedly Monday, the firm >

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Attitudes Toward Office Environments Are Everything But Predictable

Nearly a year into the coronavirus pandemic, the future of office space is still an open question. Vaccines are being administered, but as a return to the office becomes a more realistic possibility, opinion varies widely on what office workers, especially tech and highly skilled workers used to an array of amenities, will want from office space in the future — or whether they will want it very much at all.

Even as surveys show that 60% of businesses plan to shrink their office footprints and with the likes of IWG CEO Mark Dixon saying offices have changed forever, companies are making plans. Some, such as Salesforce.com, have already decided remote work will be a permanent feature going forward for their tens of thousands of employees, with about 65% of Salesforce's 54,000 employees in the office no more than one to three days per week.

“We’re not going back to the way things were,” Salesforce President and Chief People Officer Brent Hyder told The Wall Street Journal. “I don’t believe that we’ll keep every space in every city that we’re in, including San Francisco.”

With different corporate cultures, disparate communal space requirements and varying views on the effectiveness of remote work, finding a consensus on the future of office space is going to be a drawn-out process in which office owners and managers are going to have to pay attention to tenants like never before, experts say. It won't be easy.

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Federal Realty Looking To Expand To New Markets With $1.8B 'War Chest'

 

With its retail portfolio in coastal U.S. markets still facing pandemic-related restrictions, one of the largest publicly traded retail owners is looking to deploy capital to expand into new parts of the country.

Federal Realty Investment Trust CEO Don Wood said on the firm's fourth-quarter earnings call Friday it has $800M in cash on hand, an untapped $1B credit facility and relatively little debt due in the coming years, giving it the ability to make new investments.

"We've got something of a war chest on hand, should we find retail opportunities that fit our business model in 2021 and 2022," Wood said on the call, according to a Seeking Alpha transcript

"And make no mistake, we're actively looking, including in markets with hot job and income growth where we haven't looked before," Wood added. "A little more geographic diversity in our income stream carefully considered is an objective of ours."

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