(Crain’s) — A pharmacy benefits manager leased 106,000 square feet in north suburban Bannockburn to absorb employees from its recent acquisition of a Walgreen Co. unit.
Catalyst Rx signed a long-term lease at 1200 Lakeside Drive, according to sources. The lease is one of the largest new office deals in the Chicago suburbs in 2011.
Rockville, Md.-based Catalyst Health Solutions Inc. paid $525 million in June for Walgreen’s Health Initiatives Inc. pharmacy benefits management business. The acquisition boosted subsidiary Catalyst Rx’s membership to 18 million customers in the United States and Puerto Rico, from 7 million before the deal.
Former Walgreens Health Initiatives employees will move to Bannockburn from the Walgreen headquarters in Deerfield. The Bannockburn building, 1200 Lakeside Drive, is a 257,191-square-foot, three-story office structure along the east side of Interstate 94. It is owned by Newton, Mass.-based CommonWealth REIT.
The Lake County north suburban submarket, where Bannockburn is located, had 28.3% vacancy in the third quarter, highest of all the Chicago-area submarkets, according to research from Chicago-based Jones Lang LaSalle Inc. Overall suburban office vacancy was 24.7% at the end of the third quarter, Jones Lang data shows.
Daniel McCarthy, the Jones Lang LaSalle senior vice-president who represented Catalyst Rx, declined to comment.
Brokers for Colliers International, which leases the building, did not return phone calls. Calls to a Catalyst Rx executive and a spokeswoman also were not returned. For the entire article and further information click here
Thursday, October 27, 2011
Wednesday, October 26, 2011
Block 37 Office Building to sell for $182 million
(Crain's) — Prudential Real Estate Investors LLC is paying $182 million for the 16-story office tower at Block 37 in the Loop, stepping in after an earlier deal fell apart.
The Newark, N.J.-based investor is scheduled to close Thursday on the acquisition of the 439,434-square-foot building at 22 W. Washington St., sources say. Prudential's price of $182 million, or $414 a square foot, is about $5 million less than Israeli-based investor IDB Group agreed to pay for the building in July.
Prudential is buying the property from its developer, a venture between Chicago-based Golub & Co. and New York-based investment manager BlackRock Inc.
Completed in 2008, the building is 98.9% leased, according to real estate data provider CoStar Group Inc. The developers refinanced $115 million in construction loans late in 2008.
Chicago-based investment research firm Morningstar Inc. rents 268,253 square feet at 22 W. Washington St. The most visible tenant is WBBM-TV/Channel 2, whose newscasts can by seen by State Street-area shoppers as they walk past the ground floor's large windows. The TV station leases 116,499 square feet.
Prudential had previously looked at the building before an affiliate of IDB Group agreed to buy it. But the Israeli investors, who had already paid a hefty $117 million for the 112,037-square-foot Barneys New York store on Oak Street this spring, did not close on the acquisition amid a shaky U.S. economy.
When the deal with IDB Group fell through, Chicago-based Holliday Fenoglio Fowler L.P. brokers working on the sale resumed negotiations with Prudential.
Prudential's local investments include the 37-story, 451-unit Left Bank at K Station apartment building in the West Loop. Prudential also is buying Sono East, a 324-unit apartment building under construction on the edge of Lincoln Park.
The Newark, N.J.-based investor is scheduled to close Thursday on the acquisition of the 439,434-square-foot building at 22 W. Washington St., sources say. Prudential's price of $182 million, or $414 a square foot, is about $5 million less than Israeli-based investor IDB Group agreed to pay for the building in July.
Prudential is buying the property from its developer, a venture between Chicago-based Golub & Co. and New York-based investment manager BlackRock Inc.
Completed in 2008, the building is 98.9% leased, according to real estate data provider CoStar Group Inc. The developers refinanced $115 million in construction loans late in 2008.
Chicago-based investment research firm Morningstar Inc. rents 268,253 square feet at 22 W. Washington St. The most visible tenant is WBBM-TV/Channel 2, whose newscasts can by seen by State Street-area shoppers as they walk past the ground floor's large windows. The TV station leases 116,499 square feet.
Prudential had previously looked at the building before an affiliate of IDB Group agreed to buy it. But the Israeli investors, who had already paid a hefty $117 million for the 112,037-square-foot Barneys New York store on Oak Street this spring, did not close on the acquisition amid a shaky U.S. economy.
When the deal with IDB Group fell through, Chicago-based Holliday Fenoglio Fowler L.P. brokers working on the sale resumed negotiations with Prudential.
Prudential's local investments include the 37-story, 451-unit Left Bank at K Station apartment building in the West Loop. Prudential also is buying Sono East, a 324-unit apartment building under construction on the edge of Lincoln Park.
Monday, October 17, 2011
Industrial Vacancy Lowest Since Early 2009
(Crain’s) — The slowing economy isn’t slowing down the local market for industrial real estate.
The vacancy rate for Chicago-area industrial property fell to 11.3% in the third quarter, down from 11.8% in the second quarter and 12% a year earlier, according to Colliers International. It was the lowest local vacancy rate since first-quarter 2009
Net absorption, a key demand gauge representing the change in the amount of lease and occupied space compared with the previous three-month period, was nearly 5 million square feet. That increase, the largest jump in one period since the final quarter of 2007, followed two quarters of negative absorption.
“The pent-up demand from the last several years finally came to fruition as companies felt comfortable taking on expansion projects,” says David Bercu, a principal in Colliers’ Rosemont office. “They were embraced by landlords who had space sitting empty and were aggressive in their lease and sale proposals. The pent-up demand had to be satisfied at some point.”
Much of the third-quarter boost came from 16 transactions of more than 200,000 square feet — 10 leases and six building sales. Mr. Bercu believes that reflects larger companies’ ability to weather tough economic times.
“The larger companies have been very conservative over the last few years and have cash on hand,” he says. “They’ve ridden out the storm and now feel comfortable doing larger projects. I’m not sure the smaller companies have that same level of confidence.”
Indeed, the flagging economy has knocked the confidence of many companies, fueling worries that the current recovery in the real estate market may stall out.
“I do think that Washington and partisan politics needs to be resolved,” Mr. Bercu says. “It’s creating an environment of uncertainty for businesses. The gridlock has to be resolved.”
After the flurry of transactions in the third quarter, Mr. Bercu expects more of a gradual decrease in supply in the year’s final three months. And while industrial vacancies and absorption are improving, rents are still well below pre-recession levels.
Yet Mark Goode, principal at Venture One Real Estate LLC, remains optimistic. The Lincolnshire-based firm has acquired 12 Chicago-area industrial buildings and launched two new developments in the past year near the Chicago area. He says he has seen more companies scouting industrial space in recent months.
“You’ve seen companies that have been wanting to grow and expand, but you’re coming out of a major recession,” Mr. Goode says. “Now we’re seeing larger spaces being absorbed.”
For the entire story and more information you can check out the full article by clicking here.
He anticipates increased assembling and manufacturing in the Midwest, and Chicago is traditionally a strong market in the industrial real estate sector.
“If manufacturing and productivity are going to continue improving in the United States, the Midwest is the best place to facilitate that,” Mr. Goode says. “We have the labor force and the location, and I think the growth is going to continue.”
The vacancy rate for Chicago-area industrial property fell to 11.3% in the third quarter, down from 11.8% in the second quarter and 12% a year earlier, according to Colliers International. It was the lowest local vacancy rate since first-quarter 2009
Net absorption, a key demand gauge representing the change in the amount of lease and occupied space compared with the previous three-month period, was nearly 5 million square feet. That increase, the largest jump in one period since the final quarter of 2007, followed two quarters of negative absorption.
“The pent-up demand from the last several years finally came to fruition as companies felt comfortable taking on expansion projects,” says David Bercu, a principal in Colliers’ Rosemont office. “They were embraced by landlords who had space sitting empty and were aggressive in their lease and sale proposals. The pent-up demand had to be satisfied at some point.”
Much of the third-quarter boost came from 16 transactions of more than 200,000 square feet — 10 leases and six building sales. Mr. Bercu believes that reflects larger companies’ ability to weather tough economic times.
“The larger companies have been very conservative over the last few years and have cash on hand,” he says. “They’ve ridden out the storm and now feel comfortable doing larger projects. I’m not sure the smaller companies have that same level of confidence.”
Indeed, the flagging economy has knocked the confidence of many companies, fueling worries that the current recovery in the real estate market may stall out.
“I do think that Washington and partisan politics needs to be resolved,” Mr. Bercu says. “It’s creating an environment of uncertainty for businesses. The gridlock has to be resolved.”
After the flurry of transactions in the third quarter, Mr. Bercu expects more of a gradual decrease in supply in the year’s final three months. And while industrial vacancies and absorption are improving, rents are still well below pre-recession levels.
Yet Mark Goode, principal at Venture One Real Estate LLC, remains optimistic. The Lincolnshire-based firm has acquired 12 Chicago-area industrial buildings and launched two new developments in the past year near the Chicago area. He says he has seen more companies scouting industrial space in recent months.
“You’ve seen companies that have been wanting to grow and expand, but you’re coming out of a major recession,” Mr. Goode says. “Now we’re seeing larger spaces being absorbed.”
For the entire story and more information you can check out the full article by clicking here.
He anticipates increased assembling and manufacturing in the Midwest, and Chicago is traditionally a strong market in the industrial real estate sector.
“If manufacturing and productivity are going to continue improving in the United States, the Midwest is the best place to facilitate that,” Mr. Goode says. “We have the labor force and the location, and I think the growth is going to continue.”
Thursday, October 13, 2011
Downtown Office Vacancy Improves for 3rd Straight Quarter
(Crain's) — Downtown office landlords took another step forward in the third quarter, but a sputtering economy could stand in the way of a full recovery.
The downtown office vacancy rate, including sublease space, fell to 15.8% in the quarter, down from 15.9% a quarter earlier and 17.0% a year earlier, according to a report from CB Richard Ellis Inc. It was the third quarterly decline in a row.
Net absorption, a key demand gauge measuring the change in the amount of leased and occupied space compared with the previous period, was positive for a fifth consecutive quarter, the report shows. Downtown net absorption totaled 192,976 square feet, down from 549,090 in the second quarter.
The positive numbers are good news for building owners still smarting from the recession. Yet with the economy slowing down, few landlords are feeling confident about the future.
“It wouldn't take much to stop the positive momentum we've seen,” says CB Richard Ellis Executive Vice-president Cal Wessman, who represents tenants. “If people decide a second recession is coming, or if a major employer decides to scale back, that could put the brakes on it.”
Asking rents averaged $31.98, barely up from $31.82 the previous period and $31.67 a year earlier. And actual downtown rents remain virtually unchanged in recent quarters, according to many real estate professionals.
Many tenants are signing leases for less office space after cutting jobs since the recession. But there are pockets of growth, especially in the technology sector. Mr. Wessman says many small tech firms have expanded, going, say, from 10,000 to 20,000 square feet, leases that have a positive cumulative effect on the market.
“There are a lot of technology companies out there who are saying, ‘We want to double our space. We want to take another floor,'” he says. “That's a great sign for Chicago.”
One-fourth of office jobs created in the U.S. within the past 18 months were in high-tech software and services, according to a new report from Chicago-based real estate firm Jones Lang LaSalle Inc. The report classifies Chicago as an emerging high-tech market and says “the announced acquisition of Motorola Mobility by Google could bolster start-up activity and lend to the creation of a mobile high-tech cluster.”
The JLL report notes that new social media, digital marketing and application and Web development companies are driving growth in the area, mostly downtown.
“Though the sector is experiencing overall growth in Chicago, it has not yet reach a large enough critical mass to impact office market conditions in a metro (area) containing 235 million square feet of space,” the report says.
On the supply side, several developers continue to court big tenants to anchor new downtown buildings. None have succeeded yet, good news for existing landlords.
“It's possible that a new building gets announced in the next 12 months,” Mr. Wessman says. “More than one would be tough in this environment.”
Direct vacancy at downtown buildings fell for a fifth consecutive quarter. It is now 14.3%, a drop from 15.1% a year ago. Direct vacancy at Class A buildings was flat at 13.2%, but fell to 14.8% from 15.3% at Class B buildings. The Class C direct vacancy rate was unchanged at 15.4%.
Big tenants that signed leases in the third quarter included Fifth Third Bank, which expanded and renewed at 222 S. Riverside Plaza. The bank, Mr. Wessman''s client, now rents 218,135 square feet in the West Loop building, an increase of 35,000 square feet.
“Fifth Third was kind of anomaly, in that they increased space,” he says.
The downtown office vacancy rate, including sublease space, fell to 15.8% in the quarter, down from 15.9% a quarter earlier and 17.0% a year earlier, according to a report from CB Richard Ellis Inc. It was the third quarterly decline in a row.
Net absorption, a key demand gauge measuring the change in the amount of leased and occupied space compared with the previous period, was positive for a fifth consecutive quarter, the report shows. Downtown net absorption totaled 192,976 square feet, down from 549,090 in the second quarter.
The positive numbers are good news for building owners still smarting from the recession. Yet with the economy slowing down, few landlords are feeling confident about the future.
“It wouldn't take much to stop the positive momentum we've seen,” says CB Richard Ellis Executive Vice-president Cal Wessman, who represents tenants. “If people decide a second recession is coming, or if a major employer decides to scale back, that could put the brakes on it.”
Asking rents averaged $31.98, barely up from $31.82 the previous period and $31.67 a year earlier. And actual downtown rents remain virtually unchanged in recent quarters, according to many real estate professionals.
Many tenants are signing leases for less office space after cutting jobs since the recession. But there are pockets of growth, especially in the technology sector. Mr. Wessman says many small tech firms have expanded, going, say, from 10,000 to 20,000 square feet, leases that have a positive cumulative effect on the market.
“There are a lot of technology companies out there who are saying, ‘We want to double our space. We want to take another floor,'” he says. “That's a great sign for Chicago.”
One-fourth of office jobs created in the U.S. within the past 18 months were in high-tech software and services, according to a new report from Chicago-based real estate firm Jones Lang LaSalle Inc. The report classifies Chicago as an emerging high-tech market and says “the announced acquisition of Motorola Mobility by Google could bolster start-up activity and lend to the creation of a mobile high-tech cluster.”
The JLL report notes that new social media, digital marketing and application and Web development companies are driving growth in the area, mostly downtown.
“Though the sector is experiencing overall growth in Chicago, it has not yet reach a large enough critical mass to impact office market conditions in a metro (area) containing 235 million square feet of space,” the report says.
On the supply side, several developers continue to court big tenants to anchor new downtown buildings. None have succeeded yet, good news for existing landlords.
“It's possible that a new building gets announced in the next 12 months,” Mr. Wessman says. “More than one would be tough in this environment.”
Direct vacancy at downtown buildings fell for a fifth consecutive quarter. It is now 14.3%, a drop from 15.1% a year ago. Direct vacancy at Class A buildings was flat at 13.2%, but fell to 14.8% from 15.3% at Class B buildings. The Class C direct vacancy rate was unchanged at 15.4%.
Big tenants that signed leases in the third quarter included Fifth Third Bank, which expanded and renewed at 222 S. Riverside Plaza. The bank, Mr. Wessman''s client, now rents 218,135 square feet in the West Loop building, an increase of 35,000 square feet.
“Fifth Third was kind of anomaly, in that they increased space,” he says.
Thursday, October 6, 2011
ARA sells Ohio manufactured housing community to Chicago company
Atlanta-based ARA, an investment advisory brokerage firm, recently sold the Greenfield Estates Manufactured Home Community in Groveport, Ohio.
Greenfield Estates is a 126-site all-ages community located within the Columbus MSA. The community sits 11 miles from downtown Columbus and is positioned on 20.6 acres.
Todd Fletcher and Andrew Shih, ARA National Manufactured Housing Group co-directors, represented the un-named special servicer in the sale of the asset. october Invsestments Properties, a Chicago-based company, purhcased the community.
Greenfield Estates is a 126-site all-ages community located within the Columbus MSA. The community sits 11 miles from downtown Columbus and is positioned on 20.6 acres.
Todd Fletcher and Andrew Shih, ARA National Manufactured Housing Group co-directors, represented the un-named special servicer in the sale of the asset. october Invsestments Properties, a Chicago-based company, purhcased the community.
Wednesday, October 5, 2011
Evanston Office/Medical Building slated to sell for $35 million
(Crain's) — A Boston-area real estate investment firm is set to close on a downtown Evanston office building where a more lucrative deal with a local buyer fell through last fall.
The six-story building at 909 Davis St. is expected to sell for about $35 million, or about $180 per square foot, according to one person familiar with the transaction. The buyer, Wakefield, Mass.-based Franklin Street Properties, is expected to close Friday.
Last fall, Northbrook-based Romanek Properties Ltd. was close to buying the building for more than $39 million before the deal fell through. That sale would have fetched about $200 per square foot.
James Postweiler, a managing director with Chicago-based Jones Lang LaSalle Inc. who is representing the seller, declined to comment. The building's owner, a German real estate fund advised by New York-based Real Estate Capital Partners L.P., bought it for $34.2 million in 2003.
The buyer and seller were not immediately available late Tuesday.
Built in 2002, the structure, with 195,245 square feet of office space, is fully leased, according to real estate data provider CoStar Group Inc. The largest tenant is textbook publisher Houghton Mifflin Harcourt, which subleases much of its 149,000 square feet but has a lease until 2017. The ground floor includes some retail.
“It's the best building in town, by far, because of the amenities,” says William Novelli, a CB Richard Ellis Inc. senior vice-president in the local office who previously listed the property but is no longer affiliated with the building.
The north suburban building has nearby access to Metra and CTA trains, as well as retail and condominiums. In Evanston, an existing building is an attractive investment because of high construction costs and a relative lack of available land for new developments, Mr. Novelli says.
“It would be difficult to build that today,” he says.
Franklin Street Properties' portfolio includes many suburban office buildings, and it also organizes real estate investment trusts.
The pending deal in Evanston comes at a time when a shaky economy has caused increased caution among potential buyers in the suburbs, some real estate observers say.
“Right now it's probably been a little tempered compared to what it was,” Mr. Novelli says. “The suburbs have had more of the users buying and only a few investors buying. There's still a demand, for the right deal. For the most part, buyers are hesitant because of the uncertainty.”
The six-story building at 909 Davis St. is expected to sell for about $35 million, or about $180 per square foot, according to one person familiar with the transaction. The buyer, Wakefield, Mass.-based Franklin Street Properties, is expected to close Friday.
Last fall, Northbrook-based Romanek Properties Ltd. was close to buying the building for more than $39 million before the deal fell through. That sale would have fetched about $200 per square foot.
James Postweiler, a managing director with Chicago-based Jones Lang LaSalle Inc. who is representing the seller, declined to comment. The building's owner, a German real estate fund advised by New York-based Real Estate Capital Partners L.P., bought it for $34.2 million in 2003.
The buyer and seller were not immediately available late Tuesday.
Built in 2002, the structure, with 195,245 square feet of office space, is fully leased, according to real estate data provider CoStar Group Inc. The largest tenant is textbook publisher Houghton Mifflin Harcourt, which subleases much of its 149,000 square feet but has a lease until 2017. The ground floor includes some retail.
“It's the best building in town, by far, because of the amenities,” says William Novelli, a CB Richard Ellis Inc. senior vice-president in the local office who previously listed the property but is no longer affiliated with the building.
The north suburban building has nearby access to Metra and CTA trains, as well as retail and condominiums. In Evanston, an existing building is an attractive investment because of high construction costs and a relative lack of available land for new developments, Mr. Novelli says.
“It would be difficult to build that today,” he says.
Franklin Street Properties' portfolio includes many suburban office buildings, and it also organizes real estate investment trusts.
The pending deal in Evanston comes at a time when a shaky economy has caused increased caution among potential buyers in the suburbs, some real estate observers say.
“Right now it's probably been a little tempered compared to what it was,” Mr. Novelli says. “The suburbs have had more of the users buying and only a few investors buying. There's still a demand, for the right deal. For the most part, buyers are hesitant because of the uncertainty.”
Subscribe to:
Posts (Atom)