This Week's Chicago Deal Sheet
The Chicago region’s data centers saw 10.7 MW of net absorption in the second half of 2018, bringing market vacancy to 10.7%, down from 11.2% in the first half of last year, according to CBRE’s latest U.S. Data Center Trends Report.
The region remains one of the largest data center markets in the nation, boasting the fourth-largest capacity at 243 MW, according to CBRE. Surging demand led to a 70% inventory increase since 2015. But with developers delivering so much new product, and leasing velocity slowing down in 2018, vacancy increased 180 basis points in the past year.
CBRE experts say this new product may boost leasing activity, as supply constraints have hindered big users expanding in the past. With a total of 73.2 MW delivered in the past two years and the market currently offering 26 MW of available space, users now have more options.
“Chicago remains one of the most important geographic locations for data center providers due to its strategic location, access to plentiful power and connectivity and proximity to population centers,” CBRE’s Todd Bateman said.
“However, leasing velocity has been affected by meaningful competition from other markets to lure these users,” he said. “Chicago will become more competitive in time, but currently a delta exists.”
EXECS
Patrick Kearney joined GlenStar Properties’ executive team as a principal. Kearney will head acquisitions and development for the company, and assist with asset management and other strategic initiatives. He has helped complete the acquisition, disposition and development of more than 35M SF and $8.5B of commercial and residential property. Kearney most recently served as a regional managing director with Tishman Speyer overseeing the Midwest.
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Lee & Associates promoted three people:
- Nick Eboli was named executive vice president. Eboli has been with Lee & Associates of Illinois since 2008. He specializes in industrial property sales and leasing in Fox Valley.
- Jay Farnam was also promoted to executive vice president. Farnam joined Lee & Associates in 2013 after 10 years in the industry. He specializes in industrial brokerage and advisory services with a concentration in North and Central DuPage.
- Andrew Block was named senior associate.
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The Aspen Institute named Tara Hovey, president and chief operating officer of luxury residential developer Optima, to its 2019 class of Henry Crown Fellows. The group of entrepreneurial leaders, mostly from the world of business, and all between the ages of 30 to 45, will spend four weeks over the course of two years in structured retreat — exploring leadership, their core values, their vision for a good society and their desired legacies and how to tackle the world’s most intractable problems.
LEASES
CBRE’s Bill Elwood and Rob Graham completed a 36K SF lease renewal for flexible workspace provider Regus at Woodfield Preserve Office Center, 10 North Martingale Road in Schaumburg, on behalf of Zeller Realty Group. Regus has been a tenant at Woodfield Preserve since 2000. It was represented by JLL’s Kellen Monti. ZRG significantly upgraded the property with new finishes, spec suite spaces and numerous amenities. Both buildings at Woodfield Preserve, now connected by an outdoor courtyard, have fitness centers, game rooms, conference centers, WiFi lounges and full-service delis with catering services.
SALES
Black Creek Group acquired industrial properties in three submarkets of the Chicago region: I-55 Corridor, I-90 Elgin Corridor and Lake County. The company already owns facilities in each submarket, which as of Dec. 31 totaled approximately 4.9M SF, including three buildings under development. Each of the newly acquired properties is fully leased and near major traffic arteries. The largest of the three, 2770 Alft Court, is in Elgin, and the other two buildings are at 1881 Normantown Road in Romeville and 351-355 Hastings Drive in Buffalo Grove.
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Podolsky Circle CORFAC International completed the sale of 1820 Ridge Road in suburban Homewood, a three-story, 47K SF, multi-tenant office property. The Podolsky team of Alissa Adler, John Homsher and Paul Tesdal represented the seller, Husky Lake Acquisition. The property was sold to AM Realty Management for $800K. Leading up to the sale, Podolsky increased the property’s occupancy from 15% to 95% by implementing a multi-year capital improvement and strategic marketing plan.
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Jarrell Housing Group purchased eight rental buildings totaling 100 units in Chicago’s Washington Park neighborhood for $7.8M. Interra Realty’s David Goss, Jon Morgan and Lucas Fryman represented the buyer and the seller, St. Edmund’s Redevelopment Corp.
The portfolio comprises Michigan Corners, a two-building property at 5656-58 South Michigan and 5700-02 South Michigan; and Michigan Plaza, a six-building community with 64 apartments between 5701 South Michigan Ave. and 6058 South Michigan Ave. The acquisition was partially financed with tax credits from CREA LLC, an Indianapolis-based tax syndicator.
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Essex Realty Group completed the $6.6M sale of ReVerb Oak Forest at 15928 South LeClaire Ave., a 72-unit garden-style complex in suburban Oak Forest. The property has two 36-unit buildings and 98 surface parking spaces. Doug Imber, Kate Varde and Clay Maxfield represented the seller, and Brian Kochendorfer, Brian Karmowski and Troy Beebe represented the buyer.
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Colliers International | Chicago’s Kelly Joyce and Suzanne Serino represented a private investor in the $2.5M sale of 2605 Clearbrook Drive in Arlington Heights, a 47K SF industrial warehouse facility on 1.15 acres. The buyer, wine distributor Misa Imports, will consolidate from two buildings in Elk Grove Village and expand at 2605 Clearbrook Drive. Karla Thomas and Lina Zoraikat of Urb & Burb Realty represented the buyer.
CONSTRUCTION AND DEVELOPMENT
Conor Commercial Real Estate and Globe Corp. started construction of Northwest Pointe III, a two-building project on a 20.5-acre corner parcel within Elgin’s Northwest Corporate Park. It will total 349K SF and accommodate either a single or multi-tenant configuration. The plans include one building totaling 163K SF and a second building totaling 186K SF. The facility will have a 32-foot clear height. The Northwest Pointe I and II projects were developed, fully leased and sold over the past three years. Lee & Associates’ Ken Franzese and John Cassidy serve as marketing agents, and a design/build team of McShane Construction Co. and Ware Malcomb is providing design and construction services.
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J.C. Anderson completed an office renovation for Williams Montgomery & John Ltd. in Willis Tower. The firm was selected to complete a renovation of the law firm’s entire office, which included a new reception area, offices, conference rooms and a new IT room. The company’s team, led by John Angelovich and Mark Vold, carried out a phased relocation plan for staff so their offices could be disassembled and rebuilt without disruption. Gensler provided the architectural services.
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Related Midwest celebrated the grand opening of the condominiums at One Bennett Park, the developer’s 70-story residential tower in Chicago’s Streeterville neighborhood. It is the city’s first high-rise designed by Robert A.M. Stern Architects. GREC Architects is the local architect of record. Related Midwest also unveiled One Bennett Park’s owner-exclusive amenities, a condominium model home by Bruce Fox Design, its on-site sales center and the completed condominium lobby, designed by RAMSA, which showcases works by artists Tomás Saraceno and Pae White. One Bennett Park includes 69 condominiums on floors 41 through 66, and 279 apartments on floors four through 39.
FINANCING
X Social Communities, a multifamily division of PMG, closed a $30.7M loan from NXT Capital to refinance its 99-unit X Chicago project, which opened in June 2018. The loan replaces a construction loan from Principal Financial Group and returns capital to equity investors, including Raven Capital Management. X Chicago joins X Logan Square, which the company delivered in 2016, and X Miami, which was delivered in 2018. To date, PMG and Raven have secured capital for $1B in X projects with a near-term pipeline that includes Denver, Fort Lauderdale, Oakland, Orlando and Phoenix. Andrew Warman, Jonathan Blank and Scott Buscemi led the PMG team, and Matthew Ehret and Jay Evans led the NXT Capital team. HFF’s Jimmy Conley and Christopher Peck brokered the transaction.
