This Week's Chicago Deal Sheet
The Chicago tech market continues to expand, adding 4,582 jobs in 2017 and 2018, while occupancy grew by more than 4M SF since last year, according to CBRE’s annual Tech-30 report, which measures the industry’s impact on office rents in the 30 leading technology markets in the U.S. and Canada.
Tech firms in Chicago expanded employment 6.7% from 2017-2018, accounting for 39% of all new office workers added, and now occupy 17.7M SF in the Central Business District, CBRE found.
In total, Chicago now has a high-tech industry of 73,127 people. This concentration makes Chicago a top expansion target for West Coast tech firms, according to CBRE, and since 2013, San Francisco Bay Area firms leased 2M SF in the Chicago market.
“The city’s highly skilled workforce has attracted some of the world’s largest tech firms as they look to tap into the market’s immense talent at a much more affordable cost than coastal alternatives,” CBRE Vice Chairman Brad Serot said.
CBRE’s analysis found that tech companies accounted for 21% of major office-leasing activity in the first half of this year, up from 11% when CBRE began tracking this data in 2011. The tech sector’s job growth, which slowed to 4.5% in this year’s first half but is still more than double the national job-growth rate, fueled that strong leasing activity.
Strong demand and limited inventory suitable for tech drove also drove rent growth, with Chicago office rents increasing 5.7% from the second quarter of 2017 to this year’s second quarter. Chicago’s top tech submarket, River North, has a 32% rent premium from the overall market with average rent at $41.56.
EXECS
Cresa added two advisers to its Chicago office. Addison Coll most recently was a professional golfer, and Michael Neff worked as an acquisitions analyst at LG Construction. Both will specialize in tenant site selection and business development, handling lease abstracts, financial analysis and market intelligence for assignments.
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Jeffrey Hoffmann joined A&G Real Estate Partners as senior managing director and head of the firm's restaurant division. Over the past 26 years, the Chicago-based Hoffmann advised and financed hundreds of restaurant operators of all types and sizes, including Dave & Buster's, Ruth's Chris Steak House, Taco Bell, Wendy's, Burger King, Jack In the Box and Pizza Hut. He most recently served as vice president of the Franchise Finance Group at CIT Bank.
SALES
NAI Hiffman’s Lawrence Much, Steve Connolly and Drew Bulson completed the sale of 7557-7575 South 78th Ave., a 254K SF industrial building in southwest suburban Bridgeview. The team marketed the property on behalf of the owner, Heller Industrial Parks, and also procured the buyer, TradeLane Properties, an Oak Brook-based private investment group. The new owner plans to modernize the building, perhaps into a last-mile hub for e-commerce, and hired NAI Hiffman as its leasing agent. Built in 1970, the warehouse includes heavy power for manufacturing, rail service and land for outside storage.
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Scott Maesel and Adam Thomas of SVN Chicago Commercial completed the $3.1M sale of a 42K SF land site at 2123-2147 West Madison Ave. on Chicago’s Near West Side near the United Center. It sold after less than three months on the market, and is zoned to permit 104 units.
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Colliers International | Chicago’s Tyler Hague and Lauren Stoliar represented Newcastle Limited in the acquisition from Michigan Avenue Real Estate Partners of Jackson Throop Place, a 93-unit luxury apartment building developed in 2016 at 1241-1245 West Jackson Blvd. in Chicago’s West Loop.
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Inland Commercial Brokerage's Eric Spiess facilitated the sale and closing of a 13.5-acre land site at Route 6 and Maple Road in Joliet on behalf of the Roman Catholic Diocese of Joliet. The land, purchased by Maple Road Property, a subsidiary of Austin-Tyler Construction, is part of a portfolio of excess property from the diocese. Zoned for agriculture, the property is adjacent to Ss. Cyril & Methodius Cemetery, also owned by the diocese, and backs up to the Lower Spring Creek County Forest Preserve.
LEASES
KTGY Architecture + Planning will relocate its Chicago office from 343 West Erie St. in River North to 217 North Jefferson St. in the Fulton River District. The new space features an open-plan design, with a fully equipped employee kitchen, lounge and gathering area, multiple conference rooms and group collaboration spaces, and a mothers’ room. Recent projects of the firm include the Barnes & Thornburg Building, a 55K SF development that marks the first new office building in downtown South Bend, Indiana, in more than 20 years.
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Target Corp. leased the entire Rock Creek Logistics Center, a 1.2M SF industrial building developed by The Opus Group in a joint venture partnership with AEW Capital Management, at 3300 Channahon Road in Joliet, a southwestern suburb of Chicago. Target will occupy the space beginning in November. Opus was also the design-builder and the architect and structural engineer of record. CBRE’s Traci Payette and Paige Rickert represented Target, and Steve Connolly and NAI Hiffman’s Eric Tresslar represented ownership.
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Darwin Realty facilitated a lease between Axis Warehouse Management and CenterPoint Properties for the third-party logistics company’s new 174K SF space at 500 Country Club Drive in Bensenville, a 1974 building with 22-foot clear height ceilings. CenterPoint’s Danielle Radtke and Richmond Breslin LLC attorney Jerome Richman supervised the transaction. Axis Warehouse’s Frank Pagone, Ed Louis and Daniel Goldberg, along with attorney John Chitkowski of Chitkowski Law Offices, worked with the brokerage team. Rick Daly led the Darwin Realty team, with assistance from George Cibula.
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Child care provider Bright Horizons will open a 14K SF center at 1835 West Harrison St., the site of the old Cook County Hospital. The property is undergoing a major redevelopment by MB Real Estate. Bright Horizons is the second tenant to sign a deal at the historic building, which will also host Cook County Health and Hospitals System offices. Newmark Knight Frank’s Jim Schutter represented the landlord. Suburban Real Estate Services’ Lawrence Jarosz was the tenant rep.
CONSTRUCTION AND DEVELOPMENT
Pathway to Living, the Chicago-based senior housing arm of Waterton, opened Heartis Village Brookfield in Brookfield, Wisconsin, along with owner and developer Caddis Healthcare Real Estate. The firms will hold a grand opening ceremony for the 105-unit assisted living and memory support community at 16040 West Greenfield Ave. on Nov. 13. Located on nearly 10 acres about 12 miles west of Milwaukee, the community offers 70 apartment-style assisted living units and a memory support neighborhood composed of 34 ground-level studios.
THIS AND THAT
For Five Coffee Roasters and Convene partnered up to create For Five Convene Chicago, a new downtown flagship café at 311 West Monroe St., Sterling Bay’s recently renovated building just east of Wacker Drive. Convene’s Kevin Denlinger, and For Five’s Stefanos Vouvoudakis and Tom Tsiplakos, worked together to design the space. The location also offers a specialty cocktail bar.
