This Week's Chicago Deal Sheet
Developer R2 made a tidy profit last week, selling the landmark Germania Place building at the corner of North Avenue and Clark Street to an unnamed out-of-state investor for $15M. The Chicago-based R2 bought the 1889 neoclassical building in 2017 for less than $10M, Cook County property records show.
Designed by Addison & Fiedler, the 49K SF building was the focal point for the city’s German-American community at the turn of the century. Today, it is anchored by Toronto-based Lighthouse ArtSpace, host to the Immersive Van Gogh art show, which uses digital projection to display the artist’s work and has drawn large crowds to Germania Place since 2020.
Danny Spitz and Jason St. John of Greenstone Partners represented R2 in the transaction and procured the buyer.
“We experienced a strong level of buyer interest, not only on a nationwide basis but also from international buyers,” Greenstone Partners Managing Partner Jason St. John said in a statement. “This type of buyer activity signifies the rarity of this investment that is truly best‐in‐class and in a prime location. There are seldom opportunities of this nature in the marketplace, and we are seeing buyers that were not active last year getting back into the market in droves, furthered by historically low interest rates and hedging against potential inflation.”
EXECS
MB Real Estate promoted both Katherine Lula and Cory Schauer to senior vice president. Lula, who served as MBRE’s risk manager and legal counsel from 2016 through August of 2021, has also been given the role of director of operations. Schauer has been with the company since 2007 and was appointed director of human resources in 2018. Both Lula and Schauer have also joined the MBRE Executive Committee.
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Clear Height Properties promoted Gary Rose from managing director, asset management and acquisitions to chief operations officer and president. In addition, Joe Sergi, a partner in the firm and formerly its chief operations officer, took on the new role of chief revenue officer. Rose joined Clear Height Properties in 2018 and Sergi joined in 2015.
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Cresa added Angela Roseboro to its board of directors. In her current role as chief diversity officer for Riot Games, a publisher of PC games, Roseboro leads its diversity, equity and inclusion efforts and will help guide Cresa’s efforts to become more diverse.
SALES
An out-of-state private family fund paid $10M for a multifamily portfolio at 6705-37 North California Ave. in Chicago’s West Rogers Park neighborhood. The portfolio consisted of eight contiguous buildings totaling 94 apartment units. Jeffrey Baasch of SVN | Chicago Commercial represented the seller.
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Miami-based Pensam acquired Lakeside Apartments in west suburban Wheaton and Aspen Place Apartments in west suburban Aurora, and it plans to add value to the pair through selective capital improvements. Lakeside Apartments at 1750 22nd St. consists of 204 units, a renovated clubhouse, a leasing and fitness center, a conference room, grilling stations, and a large swimming pool with a sun deck and fire pit. The 416-unit Aspen Place Apartments is at 826 Terrace Lake Drive and includes 168 townhomes with attached garages.
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Art in Motion, a charter school that promotes artistic pursuits, purchased 7415 South East End Ave., a 110K SF property in the South Shore neighborhood. Transwestern Real Estate Services’ Larry Serota and Alex Genova represented Art in Motion in the transaction. The school will renovate the building and add a new broadcast studio, recording studio, theater and additional classroom space by the start of the 2022-23 school year. Art in Motion will be a full arts high school that serves students in seventh through 12th grades.
LEASES
Medical Research Network, a global provider of clinical trials, signed a long-term lease for 17K SF at Corporate 500 Office Complex in north suburban Deerfield. MRN, which has global headquarters in the United Kingdom, will move its U.S. headquarters to the Deerfield complex. Vestian negotiated the seven-year deal for the newly built-out space on behalf of MRN, more than tripling its current footprint.
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Ally Financial signed a long-term lease for 55K SF in Schaumburg Towers at 1400-1450 American Lane in northwest suburban Schaumburg. The digital financial services company will move from nearby Itasca, where it currently occupies 44K SF, in Q3 2022. The deal brings the 882K SF property, owned by American Landmark Properties, to 70% leased. Since 2017, the company has invested more than $20M to renovate the building. Steve Kling and David Florent of Colliers International Chicago are the complex’s leasing agents. JLL’s Scott Ohlander represented Ally in the transaction.
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Game of Irons signed a lease for 18K SF in Oak Brook Promenade retail center at 3051 Butterfield Road in west suburban Oak Brook, and it will open a 16-bay golf simulation facility in November 2021. Colliers International Chicago’s Chris Irwin represented Game of Irons, and Brendan Reedy and Jimmy Danahe of CBRE represented the landlord, Retail Properties of America, in the transaction.
FINANCING
North Wells Capital closed a $21M senior refinancing of 440 North Wells St. with lender CIBC Bank USA. The eight-story, 95K SF building at the intersection of Wells and Hubbard streets in the River North neighborhood is currently 97% occupied, with the office space anchored by Curo Technologies and retail anchored by Ligne Roset. Urban Innovations provides property management, leasing and construction services for the property. North Wells Capital and Urban Innovations have owned and managed the asset since 1996.
CONSTRUCTION AND DEVELOPMENT
Lendlease will hold a groundbreaking on Sept. 15 for The Reed, its 41-story, 440-unit residential tower at 234 West Polk St. in the South Loop. Attendance at the private event, which will take place outdoors at the construction site, is limited due to Covid-19. The developer plans to deliver The Reed in 2023. It’s the second residential tower and first for-sale offering in Lendlease’s Southbank development, a 7-acre master-planned community along the South Branch of the Chicago River. It will include 244 apartments and 216 condominiums.
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J.C. Anderson completed a 55K SF renovation project for Ajinomoto Health & Nutrition North America’s new corporate headquarters at 250 East Devon Ave. in northwest suburban Itasca. The existing space was demolished and replaced with a new vestibule and entry, customer center, and multiple test labs and kitchens, as well as new office space and a large auditorium. The company is relocating from 1300 North Arlington Heights Road, also in Itasca. The construction team for J.C. Anderson was led by Joe Maguire, Larry Regovic, Mike Ruffolo and Darrel Panfil. Shive-Hattery provided the architectural and engineering design services and JLL provided project management services.
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Skender, serving as general contractor, completed construction on Salud Center, a 101-unit, 140K SF senior residential building at 3039 East 91st St. in the South Chicago neighborhood. The facility provides affordable housing for low-income seniors and is operated by the Preservation of Affordable Housing and Claretian Associates, a nonprofit housing developer and community services provider based in South Chicago. Skender collaborated with developers and co-owners POAH and Claretian Associates, as well as architects Architrave and Canopy Architecture & Design.
THIS AND THAT
The amount of available sublease space in the Chicago downtown office market increased by 78% between Q1 of 2020 and Q2 2021 to a historic high of 5.8M SF and a total vacancy rate of 20%, according to a new report from MBRE. However, that rapid growth is subsiding. There is roughly the same amount of available sublease space now as there was at the end of Q2 2021. But the demand for sublease space is growing. There has been 321K SF subleased so far in Q3 2021, which is more than the average of 300K SF subleased per quarter over the 10 years prior to the coronavirus pandemic. This subleasing activity accounts for approximately 24% of all leasing activity seen so far in Q3, according to MBRE.
