Angelo Gordon is entering Chicago's hottest suburban office submarket. The New York-based investor agreed to buy Presidents Plaza for $148M, Crain's Chicago Business reports.
A joint venture of Glenstar Properties and PGIM Real Estate acquired the 835K SF property in 2006 for $129M, according to Cook County records. GlenStar will retain a minority stake in the buildings and continue to handle leasing duties on behalf of ownership. The GlenStar-PGIM JV is cashing out at a time where office space is tight, and investor interest is at a premium, near O'Hare.
For Angelo Gordon, Presidents Plaza offers an opportunity to dramatically increase rent spreads. According to a marketing flyer from JLL, the property is 92% leased, but in-place rents are 13.1% below market value. Overall Class-A office vacancy in the O'Hare submarket ended the year at 12.9%, while Class-A office rents rose to $25.47/SF, according to MB Real Estate's Q4 2017 suburban market overview.
Presidents Plaza benefits from many of the same factors driving downtown office investment. It has good ownership in place, spent $6M to upgrade landscaping and common areas, and is a transit-oriented development, with the Cumberland Avenue Blue Line 'L' station a few blocks east. Anchor tenants include True Value, Property Casualty Insurers Association of America and AIM Specialty Health.
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