This Week's Chicago Deal Sheet

How strong is the downtown office market these days? So strong that a building that has lost tenants in recent years can sell for 70% more than what the seller originally paid for it. But Beacon Capital Partners, which had the largest acquisition of 2016 with its $470M purchase of AMA Plaza, sees long-term value in 231 South LaSalle and paid $165M to acquire it.

A venture led by Michael Silberberg bought the 20-story building, formerly the Continental Illinois Bank building, for $97M in 2012. Beacon Capital will have its hands full filling the building. 231 South LaSalle was 82% occupied at the end of 2016, and net operating income dropped to $4.8M last year. But the building is worth more because valuations of similar properties downtown have increased.

SALES

CBRE Hotels’ Brian Silberman and Scott Miller repped Agrani Heights in the sales of a 111-room Holiday Inn Express at 2111 South Arlington Heights Road to Izabella HMC-CI, and a 125-room Comfort Inn Chicago at 2120 South Arlington Heights Road to SHG 2120 Arlington Heights.

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Bradford Allen’s Craig Nadborne and John Skalla were the sole brokers in the sale of 5501 South Halsted, an 8k SF storefront in Englewood. Heartland Health Outreach will use the building as a new permanent health center for people who are experiencing instability with housing.

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Quantum Real Estate Advisors completed the following transactions:

• Daniel Waszak repped the buyer in the $2.6M sale of a single-tenant retail property at 4927 Main St. in Spring Hill, Tennessee.
• Chad Firsel and Daniel Waszak were the sole brokers in the $7.7M sale of Peru Marketplace, a 42K SF shopping center in Peru, Illinois.

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ML Realty Partners acquired a 74K SF, single-tenant warehouse at 2601 Lively Blvd. in Elk Grove Village. Paine/Wetzel's Phil Reiff Jr. and Phil Reiff Sr. repped the seller.

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NAI Hiffman’s Kelly Disser and Mike Freitag were the sole brokers in the sale of 1698 Cortland Court in Addison. Dickinson Fleet Service purchased the 7K SF property from a private business/real estate owner as part of its acquisition of the Reliable Mobile Service operating company.

LEASES

Irvine Company Office Properties recently signed more than 20 leases totaling more than 300K SF at One North Wacker, 300 North LaSalle and 71 South Wacker. Some notable leases include:

• At One North Wacker, Barnes & Thornburg signed a 98K SF lease expansion.
• At 300 North La Salle, Quarles & Brady signed a 100K SF lease expansion and extension.
• At 71 South Wacker, Consolidated Trading leased 10K SF.

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CBRE’s Nancy Pacher, Dave Mahoney and Jon Milonas repped Honigman Miller Schwartz and Cohn in a lease at 155 North Wacker. Ownership, The John Buck Co., was self-repped.

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Telos Group’s Joy Jordan, Jamey Dix and Brian Whitin repped Equity Office, and NKF’s Melissa Copley repped GATX Corp., in a 90K SF long-term HQ lease at Willis Tower.

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CBRE’s Kyle Kamin and Dan Persa repped Ankura Consulting, and Avison Young’s Brad Despot repped Irvine Cos., in a 9,500 SF multiyear lease for Ankura at 1 North Wacker.

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NKF’s Adam Marshall and Mike Deady completed the following transactions:

• Marshall and Deady repped Mitsui-Soko in a 71K SF lease renewal at 888 Thomas Drive within Bensenville Industrial Park. Building ownership, Prologis, was self-repped.
• In another lease with Prologis, Marshall and Deady repped Lion Logistics in a 45K SF lease renewal at 1001 Bryn Mawr in Bensenville.
• Marshall arranged a 43K SF lease renewal for Fidelitone Logistics at 1107 Ellis in Bensenville. The building owner, Industrial Property Trust, was self-repped.

FINANCING

NorthPoint Capital Funding secured a $65M loan on behalf of Holladay Properties for a 15-property, 1.3M SF industrial portfolio in South Bend, Indiana; Indianapolis, Indiana; Portage, Indiana; and Nashville, Tennessee. The loan allowed the borrower to retire multiple bank loans while forming a new entity that can be used to guarantee the financing of future development projects.

HIRES/PROMOTIONS

Ginsberg Jacobs named David Lapins to the firm’s equity partnership, while Karen Halm-Lutterodt was promoted to income partner.

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Hines hired Jerry Guerrero as director of diversity and inclusion. Guerrero will develop, implement and monitor programs that support Hines’ diversity and inclusion objectives and establish metrics and tools to measure progress.

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Avison Young promoted Hiren Thakar to chief operating officer, international operations. Thakar will be responsible for overseeing operations in Europe, Mexico and future locations outside of the U.S. and Canada.

DEVELOPMENT

Peak Construction completed the Marriott Residence Inn in Bolingbrook. The four-story, 77K SF, 103-room extended stay hotel features an enclosed swimming pool area, outdoor patio with BBQ and fire pit, and a multipurpose sport court.

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J.C. Anderson completed a lobby renovation at One North Franklin. The project consisted of installing marble flooring with a Roman travertine pattern throughout all of the elevator vestibules, large floor-to-ceiling specialty glass panels and new elevator wall sconces. The construction team was led by Project Manager Matt Kantro and Superintendent Dan Dunn. Gensler provided the architectural services, and JLL is the project manager for ownership.

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Morgan/Harbour Construction completed the construction of a new 41K SF HQ for ThermFlo and its sister company, Zonatherm Products, in Buffalo Grove. The construction team was led by Project Executive Brian Smith, Project Manager Rich Cassidy and Project Superintendent Scott Guerra. Ware Malcomb provided the architectural services.

KUDOS

Draper and Kramer revenue manager Sam Groppi was named to the Institute of Real Estate Management’s 30 Under 30 Class of 2017. Groppi is responsible for maximizing revenue by developing and supervising strategies across the firm’s portfolio.

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The Rainbow PUSH Coalition honored Related Midwest Senior Vice President Don Biernacki as the 2017 Distinguished Labor Leader of the Year. The award, announced at the annual Rainbow PUSH Coalition International Convention, celebrates those who display an exemplary commitment to supporting communities in Chicago by providing local residents with valuable and sustainable job training and career opportunities.

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Cawley Chicago’s Rawly Lantz, Doug Pauly and Ryan Freed were named the exclusive leasing agents for O’Hare Offices, a three-building, 450K SF office portfolio at 999, 1011 and 1111 Touhy Ave. in Des Plaines. The portfolio is owned by affiliates of Siete 7, a private investment group that occupies space in one of the buildings.