Cole Real Estate Investments Acquires Hillshire Brands Company Headquarters for $97.5M

By Gabriel Circiog, Associate Editor

Cole Real Estate Investments recently announced the acquisition of the Hillshire Brands Company headquarters on behalf of Cole Corporate Income Trust Inc. for $97.5 million. Cole Corporate Income Trust Inc. primarily invests in single-tenant, income-producing necessity corporate properties that are leased to creditworthy tenants under long-term net leases.

The Hillshire Brands Company’s 233,869-square-foot headquarters facility was just recently redeveloped by Sterling Bay Companies, which also entered into a long-term net lease with Hillshire Brands early in the process. With Hillshire’s build-out of the property, all the infrastructure and building components were completely re-done and, for an increase in natural light, windows were added on all four exposures.

Located in the West Loop submarket of Chicago’s Central Business District, the property has good visibility and accessibility, including public transportation. “This was a unique opportunity to acquire a Class A, single-tenant office in the desirable West Loop of Chicago,” said Boyd Messmann, senior vice president of office and industrial acquisitions, who represented Cole in the transaction. “One of the key factors was the long-term lease—nearly 15 years—with an investment-grade tenant.”

Following the transaction, Cole Corporate Income Trust Inc.’s investment portfolio now comprises 27 wholly owned properties in 15 states, totaling around 4.6 million square feet with a purchase price of approximately $731.1 million.

In other local real estate news, Jameson Commercial’s Lou Kahn, Ed Gerstein and Daniel Day represented Brothers Storage and Moving in their relocation from 3141 N Sheffield Ave. to 2701 S Western Ave. The company leased 50,438 square feet of office and warehouse space in the 136,000-square-foot building. Jameson Commercial represented Anderson Brothers and Mark & Michael Nelson of Nelson Hill, while Ed Wabick of Paine/Wetzel represented the ownership.

Illustration Courtesy of: www.sterlingbay.net

Regency Centers Corporation Breaks Ground on $50M First Phase of Shops on Main

By Gabriel Circiog, Associate Editor

Regency Centers Corporation has broken ground on the first phase of Shops on Main—a 147,851-square-foot community shopping center in Schererville, Ind. The shopping center is located at the intersection of two main arterial roads, U.S. Route 41 and Main Street, in the regional retail hub 25 miles southeast of Chicago. The first phase will cost $50 million, and some of anchors are scheduled to open in spring 2014.

“We appreciate the support of the town of Schererville, which is a proven retail market based upon historical sales,” said Nick Wibbenmeyer, vice president and regional officer for Regency Centers. “We’re excited to become an active member of the community by helping to create jobs. Shops on Main will reflect the key attributes that define a Regency center: market-leading anchors, prime location and enjoyable shopping environment.”

Anchored by leading fashion, footwear and home furnishing retailers, the center will include Gordmans (50,079 square feet), Ross Dress for Less (25,069 square feet), HomeGoods (23,969 square feet) and DSW Designer Shoe Warehouse (18,361 square feet).

In other local real estate news, The Chicago Tribune reports Cedar Street Co. has acquired a three-property industrial and retail portfolio in suburban Downers Grove. The portfolio was purchased for $16.2 million and includes Meadowbrook Shopping Center at 63rd & Woodward Downers Grove, University Plaza Mall at 1201-1213 Butterfield Rd., and 1400 Center Circle Drive.

The portfolio was purchased as part of the Qualteq Inc. bankruptcy case. University Plaza Mall and Meadowbrook Shopping Center will be placed on a long-term commercial mortgage-backed securities loan and primed for future development. On the other hand, 1400 Center Circle Drive has a triple net lease from a strong nationally recognized tenant positioned to secure long-term cash flow opportunities.

New $251M State-of-the-Art Malcolm X College Campus Plans Revealed

By Gabriel Circiog, Associate Editor

Mayor Rahm Emanuel and City Colleges of Chicago Chancellor Cheryl Hyman recently announced plans for the new Malcolm X College campus, a major investment in Chicago’s west side. The state-of-the-art learning facility aims to provide Chicago’s students access to the tools that will enable them to succeed in fast-growing fields, such as health sciences. The Chicago Sun-Times reports the $251 million Malcolm X College will also feature a 1,500 space parking garage.

“Providing our students with a cutting-edge education requires facilities that are up to the task. This investment in Malcolm X is critical to the success of our students in the healthcare careers of tomorrow,” said Mayor Emanuel. “And we are proud that this project will add to the vitality and economic development of the west side as a major investment in our communities.”

The investment is part of a five-year capital plan that supports City Colleges of Chicago’s College to Careers initiative and will create 950 construction jobs through 2016. CCC is also launching a community jobs program that designates up to 120 of the construction jobs for qualified applicants from the community around the new college.

In addition, CCC is also guaranteeing, through City Colleges’ Dawson Technical Institute of Kennedy-King College, 50 free slots in construction training programs for applicants without previous training who live in the communities surrounding the new campus. City Colleges has partnered with HACIA and the Chicago Urban League to recruit all applicants and work with union officials, ensuring minority and female participation in the project.

The nation’s largest African American-owned architectural firm, Moody Nolan, has been contracted by City Colleges to serve as the architect of record on the project. The firm’s Chicago office will be expanded from nine to 14 staff member and will become the largest African American-owned architectural firm in Chicago.

Located in the Eisenhower Corridor, the project is part of Mayor Emanuel’s Chicago Neighborhoods now initiative. The city is leveraging $330 million in public funding with $2.6 billion in private funding to facilitate new economic development and housing, improving the quality of life in seven sections of Chicago. The new college is expected to open in January 2016.

Rendering Courtesy of: www.ccc.edu

KBS REIT II and Hines Announce LEED Platinum Certification of 300 North LaSalle Office Tower

By Gabriel Circiog, Associate Editor

KBS REIT II and Hines recently announced that 300 North LaSalle in Chicago has been awarded Platinum certification under the U.S. Green Building Council’s LEED for Existing Buildings category. The tower had previously received a Gold certification under the LEED for Core & Shell Rating System. Developed by Hines, 300 North LaSalle was completed in 2009 and purchased by KBS REIT II in 2010. The company continues to manage the tower.

Located on the north bank of the Chicago River between the River North District and the Central Business District, the 57-story tower offers 200 feet of frontage along the river, including a large waterfront café and an outdoor plaza with seating. Standing tall at 775 feet, the 1.3 million-square-foot building is amongst the tallest buildings in Chicago.

The 57-story energy efficient office tower was designed by Pickard Chilton and features a façade clad in articulated glass and stainless steel that maximizes the introduction of daylight but also minimizes solar gain.

In order to achieve the goal of Platinum certification, green features including river-water intakes for denser water; a recycling program for paper, glass, aluminum and plastic; a green roof to reduce heat island effect; low-flow water fixtures across the building; and light switches with motion detectors had to be implemented at the property. Hines also offers its Green Office for Tenants program, which assists in giving tenants options to reduce their carbon footprint.

The office building is currently 99 percent leased, and major tenants include The Boston Consulting Group, GTCR, Kirkland & Ellis LLP and Quarles & Brady LLP.

“300 North LaSalle achieving LEED Platinum demonstrates our commitment to the environment, as well as our sustainability efforts to our tenants and community. This tower adds stature and prominence to Chicago’s great skyline while respecting our mission in sustainable design,” said Hines Vice President of Property Management Lance Knez.

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NY Developer Plans Boutique Gay-Friendly Hotel in Boystown

By Gabriel Circiog, Associate Editor

New York-based Parkview Developers LLC plans to open a gay-friendly hotel in the heart of Boystown. The approximately 112-room hotel would be located on the 3300 block of North Halsted Street and would be called Out Chicago, according to Ian Reisner, managing partner of the development firm.

ChicagoRealEstateDaily.com reports the new hotel would be modeled after the Out NYC, which opened just over a year ago in New York, and would include an enclosed atrium that would feature event space, a spa and gym, a rooftop bar, restaurant and retail space.

The scope of the project is to offer an environment where members of the lesbian, gay, bisexual and transgender community, as well as their friends and family, can feel at home when visiting Chicago. Mr. Reisner, for the same source, said the project was pitched to Alderman Tom Tunney last summer and that he now plans to deliberate with the community residents at a Triangle Neighbors Association meeting.

This information has been confirmed by John Becvar, vice president of the association, who posted an announcement of the proposal on the neighborhood association’s Facebook page: “There’s a proposal for a very large development on the 3300 N. block of Halsted to build ‘The Out Chicago’ that will include 100-plus hotel rooms. The developer is trying to rush this through and hasn’t attended Triangle meetings but is having a joint neighborhood meeting on Thursday, April 11th at 7PM at the 19th District Police Station Community Room. Everyone should definitely attend.”

Ian Reisner said his company is negotiating to acquire the land for the project across from Roscoe’s Tavern and that the firm could partner with Minibar for a bar concept in the hotel. The hotel, which would cater to members of the LGBT community, does not market itself as a gay hotel but more as a straight-friendly urban resort, with straight guests representing almost a third of the hotel business at the New York location.

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Illustration Courtesy of John Becvar via Facebook.

Loews Hotels & Resorts Breaks Ground on 400-room Hotel

By Gabriel Circiog, Associate Editor

Loews Hotels & Resorts recently held a groundbreaking ceremony on the site where it will open the Loews Chicago Hotel in 2015. Company officials, including Chairman Jonathan M. Tisch and President and CEO Paul Whetsell, were joined by Donald R. Wilson, Jr.— founder and CEO of DRW Trading Group—and Mayor of Chicago Rahm Emanuel at the ceremony.

“Even with Chicago’s hotel occupancy at a record high last year, companies continue to build more hotel stock as more and more tourists, business travelers and conventions are flocking to Chicago,” said Mayor Emanuel. “I am pleased to see this hotel rise from the ground, creating hundreds of jobs and setting up Chicago to continue its growth as one of the premiere destinations in the entire United States.”

Designed by the architectural firm Solomon Cordwell Buenz and developed by DRW, the Loews Chicago Hotel will be part of a 52-story tower that will also include 398 luxury residential apartments. The hotel will feature 400 guestrooms, including 36 suites. The new construction will also include a signature restaurant, over 25,000 square feet of meeting space, outdoor terraces, an outdoor rooftop including a swimming pool, and a spa/fitness center.

Donald R. Wilson, Jr. said: “We are excited to partner with Loews in designing and delivering a hotel and residential product. The apartment and hotel combination will be a benefit to one another, offering amenities to residents that set us apart from the current market.”

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Photo Courtesy of: Loews Hotels & Resorts via Facebook.

BEMT Invests in 24-Story Mixed-Use Luxury Rental Community

By Gabriel Circiog, Associate Editor

Bluerock Enhanced Multifamily Trust has recently announced its investment in MDA City Apartments, a mixed-use luxury rental community in downtown Chicago. The New York-based non-traded real estate investment trust has partnered with Village Green, the owner of the 24-story building. Village Green is an owner/operator with a portfolio of around 40,000 units in 13 states.

“MDA presented a unique, off-market opportunity to purchase an interest in a stable, well-occupied, core urban infill project in a primary market with a top partner,” said James Babb, Bluerock senior managing director and chief investment officer. “By recapitalizing and streamlining what had been a fairly complex capital structure, we were able to seize on a valuable opportunity at below-market cost.”

MDA City Apartments features 190 residential dwellings and 8,238 square feet of storefront retail space. The property was completed by designer Daniel Burnham Jr. in 1927 and underwent a major $45 million conversion in 2006. The historic Medical and Dental Arts Building was transformed into a Class A, LEED-certified mixed-use development.

Residents at MDA City Aparments have access to various amenities including a rooftop Sky Club, 24/7 concierge, business/conference center, fitness facility and free wireless internet in the common areas.

The property’s downtown Chicago submarket has seen vacancy rates fall since 2008 and, based on research from REIS, the rates are forecast to remain at the current level of 5 percent for the near-to-mid-term. Additionally, another important factor in BEMT’s decision to invest in MDA City Apartments was the submarket’s effective rents, which have been growing since 2010.

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Photo Courtesy of: www.villagegreen.com

Duke Realty Corporation Expands Portfolio in Chicago with Purchase of 288,000 SF Industrial Building

By Gabriel Circiog, Associate Editor

Duke Realty Corporation recently announced the acquisition of 335 W. Crossroads—a 288,000-square-foot industrial building in the I-55 submarket, which is Chicago’s second-largest industrial market. The real estate investment trust, which specializes in the ownership, management and development of bulk industrial facilities, also announced it has leased 190,080 square feet in the building to RTC Industries.

Located in Crossroads Business Park, the Class A industrial property increases Duke Realty’s industrial portfolio in the business park, where the REIT already owns 3.3 million square feet of industrial space in 10 fully leased buildings. The acquisition increases Duke Realty’s overall Chicago-area portfolio to over 10.6 million square feet and helps the REIT to meet the expansion needs of RTC, which also leases the 503,200-square-foot Crossroads V building.

“RTC has been an excellent tenant with solid growth since becoming a Duke Realty tenant,” said Steve Schnur, senior vice president of Duke Realty’s Chicago operations. “The acquisition of 335 W. Crossroads allows us to provide RTC with the additional space it needs and complements our strategy of increasing our investment in quality industrial buildings in strong distribution markets.”

The seller of 35 W. Crossroads Parkway was represented by Jeff Kapcheck with Colliers International. Bill Frain, Todd Lippmann and Jim Whalen with CBRE represented RTC Industries in their lease.

According to a recent report released by CBRE Global Research and Consulting, net absorption in the Chicago industrial market has increased to 16.9 million square feet compared to 2.4 million in 2010 and 15.7 million in 2011.

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Photo Courtesy of: www.dukerealty.com

Chart Courtesy of: CBRE Global Research and Consulting

ST Residential LLC Puts 326-unit Lex up for Sale

By Gabriel Circiog, Associate Editor

Chicago-based ST Residential LLC has hired brokers Holliday Fenoglio Fowler and Eastdil Secured to manage the sale of a 13-property portfolio with an estimated value of close to $1 billion. The multifamily properties, which were part of the failed Corus Bank condominium portfolio acquired by the venture, are located in Atlanta, Chicago, Houston, Las Vegas, Los Angeles, Phoenix, Stamford and Tampa.

ChicagoRealEstateDaily.com reports that the portfolio includes the Lex—a 326-unit condo-turned-apartment tower located in the South Loop at 2138 S. Indiana St. The 35-story tower was built by Chieftain Group Ltd., and by the time the project was completed in 2009, the condo boom had ended—leaving the developer with dozens of unsold units.

Chieftain was unable to pay off a construction loan to Corus Bank and relinquished the property to ST Residential LLC in 2011, which converted the high-rise to apartments. According to a report by Chicago-based consulting firm Appraisal Research Counselors quoted by the same source, the Lex was 75 percent leased at the end of the third quarter. ST Residential is a manager of properties owned by a public-private partnership between the FDIC and a group of leading U.S. private real estate investors.

Barry Sternlicht, chairman and CEO of Starwood Capital Group and chairman of ST Residential, said: “The Corus Bank transaction has performed extremely well for the FDIC and our private investor group. The partnership has repaid $1.3 billion of FDIC purchase money notes and has more than $1 billion of cash in hand. More than 32 loans were paid off at par, and we have sold 60 percent of the condo inventory we acquired at ever-escalating prices.”

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Photo Courtesy of: www.stresidential.com

Construction Begins on 45-Story West Loop Office Tower

By Veronica Grecu, Associate Editor

Chicago’s largest commercial real estate project in five years kicked off on January 15 in a $400 million joint venture between Canada-based Ivanhoé Cambridge—the real estate arm of Quebec pension fund manager Caisse de dépôt et placement du Québec, developer Hines of Houston and local business leader Larry Levy. An earlier report on the story by PERE News revealed that the Canadian real estate investment company secured 75 percent of the capital, while Hines covered the remaining $100 million.

The 45-story River Point tower is under development at 444 West Lake Street in the West Loop, Chicago’s financial district, on a parcel owned by Larry Levy. Designed by prominent architectural firm Pickard Chilton, the Class A office tower will include 900,000 square feet of leasable office space ready for delivery in 2016. According to a press release from Ivanhoé Cambridge, the building is pre-certified LEED Gold by the U.S. Green Building Council.

Additionally, the project includes a 1.5-acre public park that will be developed on top of the existing rail infrastructure to encourage pedestrian activity along the Chicago River.

“River Point will be a striking addition to Chicago’s skyline and the first in a new generation of office buildings.  There is significant interest from major corporate tenants,” said C. Kevin Shannahan, CEO of Hines’ Midwest and Southeast regions, at the groundbreaking ceremony.

According to Mayor Rahm Emanuel’s press office, the project will create around 1,000 construction jobs and house 3,400 permanent office jobs.

Two days after groundbreaking, River Point landed an anchor tenant, Crain’s Chicago Business reports. While developer Hine is still on the hunt for tenants, law firm McDermott Will & Emery LLP—the fifth-largest firm in Chicago—signed a letter of intent to lease 225,000 square feet of space in the tower. If the deal is closed, McDermott is expected to relocate its offices at 227 West Monroe St. in 2017, when its current lease expires.

Renderings of River Point via Pickard Chilton Architecture

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Closed Hotel to be Reintroduced to Market as Le Meridien Chicago at Oak Brook

By Veronica Grecu, Associate Editor

A shuttered Renaissance-branded hotel next to the Oakbrook Center mall in Chicago’s Oak Brook suburb will reopen in early 2014 under the Le Meridien banner. The announcement was made last week by Starwood Hotels & Resorts Worldwide Inc., who teamed up with real estate investment firm RockBridge Partners of Columbus, Ohio to transform the closed facility into an upscale hotel for both business and leisure travelers.

The 10-story Renaissance Hotel building (pictured) located at 2100 Spring Rd. was sold by General Growth Properties Inc. to RockBridge Partners for an undisclosed amount in October 2012. The property is undergoing a complex $20 million renovation that will culminate with a grand opening ceremony in January 2014.

“The comprehensive renovation and re-branding of the hotel, coupled with the strength of the Starwood system, will position Le Meridien Chicago–Oakbrook Center as the premier hotel in the market,” said Jim Merkel, president and CEO of RockBridge, as quoted in a press release by Starwood Hotels.

The hotel’s 172 guest rooms and suites will be completely refurbished and feature the signature Le Meridien Bed designed by artist Nick Dine, who is one of the members listed in Le Meridien’s “LM 100” list of design experts and consultants. A proprietary new bar and restaurant with meeting spaces will be created on the building’s ninth floor, and guests will have access to a state-of-the art fitness center and rooftop terrace.

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Image of former Renaissance Hotel via hotelsharbor.com

Transwestern Brokers Sale of Oak Creek Center Office Portfolio

By Gabriel Circiog, Associate Editor

Transwestern’s Chicago office recently announced that it has brokered, on behalf of KBS Realty Advisors, the sale of the Oak Creek Center office portfolio in Lombard, Ill. A joint venture between Investcorp and Golub acquired the 427,161-square-foot office portfolio for $39.5 million.

“Investors are beginning to recognize the value in stable, suburban-Chicago, Class B office investments,” said Gary Nussbaum, managing director of Transwestern. “This type of property can generate healthy levered returns in the current low interest rate environment. The sale of Oak Creek Center to a New York-based advisor of Middle Eastern capital marks the third time in 2012 that a significant suburban Chicago office property traded to foreign investor interests. We expect this trend to continue.”

Located in suburban Chicago’s East-West Corridor, the institutional-quality 11-building portfolio features nine single-story and two multi-story buildings in a business park setting. At the time of sale, the portfolio was 87.5 percent leased. Transwestern’s Managing Directors Gary Nussbaum and Thomas Gorman, as well as Senior Associate David Matheis, represented KBS Realty Advisors. The buyer represented itself in the transaction.

In other local real estate news, DuPont Fabros Technology Inc. announced that the company’s CH1 data center in Elk Grove Village, Ill. is now fully leased. Built in two phases, CH1 totals 485,000 square feet, 231,000 raised square feet and 36.4 megawatts of critical load.

An existing financial tenant in the company’s New Jersey facility has leased 0.43 MW in Phase I, and an existing tenant from the company’s Northern Virginia facilities has leased 2.6 MW in Phase II. The two deals take the total number of tenants in CH1 to nine with a weighted average lease term of 9.9 years.

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Photo Courtesy of: www.oakcreekcenter.com

Capital One Set to Open New Office Space in Chicago’s Loop

By Gabriel Circiog, Associate Editor

Capital One Financial Corporation is set to open a new office space in the Chicago’s central business district, known as “the Loop.” The announcement comes from the company and Mayor Rahm Emanuel. Capital One will sublease around 65,000 square feet of office space in the building—owned by State Teachers Retirement System of Ohio and located at 77 West Wacker Dr.

The new office, in the former headquarters of United Airlines, will house the company’s U.S. Card business and accommodate around 350 associates. Capital One expects to move into the space in the fourth quarter of 2013. With this move, Chicago will become a primary hub for the company’s U.S. Card business and supporting staff functions, alongside McLean and Richmond, Va.

“Capital One’s decision to locate its U.S. Card business in Chicago is a testament to the vibrancy, talent and quality that our downtown has to offer,” said Chicago Mayor Rahm Emanuel. “We look forward to a great partnership with Capital One and the tremendous value they will bring to our local community, as the company creates jobs now and in the future.”

Capital One expects to grow its presence in the Chicagoland area over the next 24 months as the company moves from existing to new locations, including the Rolling Meadows Atrium Corporate Center. The company currently has around 1,000 associates in the area, and the majority of associates at the downtown location will relocate from sites across the Chicago suburbs.

Ian Cunningham, managing vice president of Capital One U.S. Card, said since the company acquired HSBC U.S. credit card business in May, they have been working hard to outline the best footprint for their business and found Illinois best understood and appreciated the importance of a strong financial services industry.

“Chicago is a dynamic city, and the space downtown is a perfect fit for our needs,” said Cunningham. “It is a great location that provides us with access to all the resources that the city has to offer—transportation and an experienced and incredibly talented workforce.”

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Photo Courtesy of: www.77westwackerdrive.info

Health Care REIT Expands Portfolio

By Gabriel Circiog, Associate Editor

Ohio-based Health Care REIT Inc. has acquired a 192-unit senior housing development in Lake Barrington for $81.7 million from a joint venture between Senior Lifestyle Corp. and Walton Street Capital LLC, ChicagoRealEstateDaily.com reports. The complex is one of 19 properties that Health Care REIT acquired in a recent $459 million sale/leaseback deal with Chicago-based Senior Lifestyle. Chicago-based private equity firm Walton Street was Senior Lifestyle’s partner in seven of the 19 properties sold to Health Care REIT.

Located at 22320 Classic Court, Lake Barrington Woods offers both independent and assisted living services to senior citizens. The complex is 96 percent leased and will continue to be operated like all the properties sold to Health Care REIT—by Senior Lifestyle. The development features private studio, one- and two-bedroom apartments. Amenities include a beauty and barber shop, personalized care plans with 24-hour staffing, an emergency response system and housekeeping and maintenance services.

Health Care REIT earlier this year acquired another two senior housing projects in the city. The real estate investment trust also increased its market share in the senior housing sector with the recent purchase of Sunrise Senior Living Inc. and its portfolio, which includes 125 properties. The Sunrise Senior Living Inc. portfolio is now valued at $3.2 billion.

Jeff Theiler, an analyst at Green Street Advisors Inc.—a Newport Beach, Calif.-based research firm, told the same source that the health care sector has seen a trend of consolidation of ownership, as the three major REITs—Health Care REIT, Ventas Inc. and HCP Inc.—have a major advantage compared to other investors in the market.

The REITs require much lower returns on investment than competitors, such as private-equity firms, and are able to afford to pay more per purchase. This is mainly due to the low interest rates and the ability to sell stock at premiums over the value of the assets underneath.

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Image Courtesy of: www.seniorlifestyle.com

Retail Properties of America Inc. Sells Aon Hewitt Property; Walgreens Opens Store in Restored Noel State Bank Building

By Gabriel Circiog, Associate Editor

Retail Properties of America Inc. has announced the sale of the Aon Hewitt Property. Located in Lincolnshire, Ill. at 4 Overlook Point, the 818,686-square-foot office property is fully leased to Aon Corporation. The six-story office building is situated around 31 miles north of Chicago and was sold for $148 million to an undisclosed buyer.

The proceeds from the sale were utilized to repay $117.7 million of mortgage debt and accrued interest encumbering the whole Aon Hewitt Campus. The shopping center real estate investment trust continues to own the remaining 343,000-square-foot Aon Hewitt East Campus, which is fully leased to Aon Hewitt.

“The culmination of the Aon Corporation lease extension and the subsequent sale of this property over the past four months highlights our active approach to asset management and our continued ability to achieve our stated strategic initiatives that we set out earlier in the year,” stated Shane Garrison, chief operating officer and chief investment officer of RPAI. “We are pleased with the team’s progress toward meeting our target of $450 to $550 million of asset sales by the end of 2012.”

So far this year, Retail Properties of America Inc. has sold $414.4 million of non-core and non-strategic assets. Since October 1, the company has completed $185.5 million of dispositions, encompassing 1.2 million square feet and including the Aon Hewitt Property and four single-tenant retail properties. All 2012 debt maturities have been addressed in the process.

In other local real estate news, Walgreens has opened its second store in Chicago. The national drugstore chain has collaborated with the city’s Commission on Chicago Landmarks on the restoration of the Noel State Bank Building. Constructed in 1919 and designed by Gardner C. Coughlen in a neo-classical style, the building has been home to numerous banks over the years—the last being Midwest Bank which closed several years ago.

The new Walgreens store, located at the northwest corner of North and Damen avenues in Chicago’s Bucktown/Wicker Park neighborhood, has preserved the historic building’s original architectural integrity.

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New York Investors Buying Up Prime Office Properties in Downtown Chicago

By Gabriel Circiog, Associate Editor

A venture led by Michael Silberberg of Nanuet, N.Y.-based Berkley Properties LLC has agreed to buy the downtown Chicago Bank of America Building for $97 million, ChicagoRealEstateDaily.com reports. The investor group, which includes Mark Karasick and Victor Gerstein, is buying the 936,800-square-foot tower from a joint venture that includes New York-based Gramercy Capital Corp.

Located at 231 S. LaSalle St., the 20-story Art Deco tower, built in 1924, is 88.4 percent leased and—apart from Bank of America—large tenants include Accretive Health Inc., kCura and Northern Trust Corp. The latter subleases over 200,000 square feet from Bank of America.

Mark Karasick and Michael Silberberg have also struck a tentative agreement to invest  about $100 million in Prudential Plaza, a deal that would give the New York investors a controlling interest in the 2.2-million-square-foot complex. Prudential Plaza was bought by Los Angeles-based BentleyForbes Holdings LLC in 2006, a time at which commercial real estate value was reaching its peak. The venture led by Karasick and Silberberg aims to save the property from the edge of defaulting on $470 million in loans. The deal must first be approved by lenders.

Overlooking Millennium Park, the complex includes the Prudential Building, built in 1955 at 130 E. Randolph St., and Two Prudential Plaza at 180 N. Stetson Avenue, which was built in 1990.

Mark Karasick of New York-based real estate investment firm 601 W Cos. is known for high-profile real estate transactions such as the sale of the Bank of America Center in San Francisco for $1.05 billion in 2005. On the other hand, Michael Silberberg is considered a relative newcomer, as his firm’s biggest acquisition came in 2010 when Berkley Properties LLC paid $73.2 million for 180 N. LaSalle Street.

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Images Courtesy of: www.gpchicago.com and J. Crocker via Wikimedia Commons

AFL-CIO BIT Announces Investment in Wolf Point Development; Developer Smoothes Infrastructure Details

By Gabriel Circiog, Associate Editor

The AFL-CIO Building Investment Trust recently announced an investment in the proposed Wolf Point Development. The BIT joins Hines, Kennedy Enterprises and the Magellan Development Group in an effort to revitalize the long-stagnating site along Chicago’s river, one of the last prime undeveloped pieces of land around downtown Chicago.

“We are proud to support this significant development here in Chicago. It’s not only a strong investment in this city, but it is an important investment in the hard-working men and women who will help build the project,” said Tom Villanova, President Cook County Building and Trades Council. “The BIT invests in projects that not only create union jobs, but also help to secure the retirements of thousands of our members.”

The proposed three-phase project includes three LEED-certified towers with 1,285 parking space, a residential tower on the western portion and two commercial buildings placed to the south and east. The first phase of the project is a 525-foot tall residential tower that will feature 500 luxury rental units.

The signature development represents a total investment of over $1 billion in the city of Chicago and is expected to create 2,000 construction jobs. Upon completion, the project is expected to generate $40 million annually in new public revenue. The project, which will not use any public incentives, subsidies or tax increment financing, will also provide a major improvement and enhancement of the river walk, a public park and open space. The building coverage will be 22 percent of the total site area.

The Chicago Journal reports that at a recent community meeting held at the Holiday Inn Mart Plaza, Ald. Brendan Reilly said that following discussions with the project’s developers regarding certain details—particularly the traffic studies—the developers have agreed that certain infrastructure changes need to be made in order to support the project.

The changes include the diversion of car traffic from Wolf Point to Orleans Street and various other infrastructure upgrades around the project paid by the developers. The new plans have been submitted to the city, and the developers are awaiting approval in order to start construction on the west tower.

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Rendering Courtesy of: www.wolfpointchicago.com

Sterling Organization Acquires Hoffman Plaza Shopping Center

By Gabriel Circiog, Associate Editor

Palm Beach, Fla.-based Sterling Organization recently announced the acquisition of Hoffman Plaza—a 168,342-square-foot shopping center located in Hoffman Estates. The property was purchased for $14.15 million through the company’s institutional fund, Sterling Value Add Partners. Located around 25 miles northwest of Chicago’s CBD on North Roselle Road at the intersections of Golf Road and Higgins Road, Hoffman Plaza is currently 95 percent leased.

The shopping center is anchored by a 47,715-square foot Jewel Osco grocery store and a 45,111-square-foot Dania Furniture store. Other retailers in the plaza include Jackson Hewitt Tax Service, Sally Beauty, Goodyear, Papa John’s and Denny’s. Originally developed in 1972, Hoffman Plaza was renovated in 2008.

“We had been pursuing this deal on and off for almost three years, and I believe that our years of perseverance have finally paid off,” said Brian Kosoy, president and CEO of Sterling Organization. “Hoffman Plaza represented an opportunity to acquire a grocery-anchored center located in a strong market with solid demographics and tremendous traffic counts at an opportunistic price. We know the deal has many moving parts and are eager to get working on improving the property for the community and creating value for our partners.”

The Daily Herald reports that Hoffman Estates’ Economic Development Director Gary Skoog also declared interest in acquiring two properties that were recently acquired by the village. The two properties, located at 75 and 85 E. Golf Rd., are thought to compliment the continued redevelopment of the center and the village. After demolishing the existing buildings, the company is expected to look into selling the land.

Photo Courtesy of: www.cbremarketplace.com

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Nokia to Relocate Itasca Division to Chicago

By Gabriel Circiog, Associate Editor

Nokia confirmed its commitment to Chicago by announcing, together with Mayor Rahm Emanuel, the relocation of its Mobile Phones Xpress Internet Services group from Itasca to Chicago. Nokia’s largest office in North America is already located in Chicago and houses approximately 1,200 employees.

Nokia’s Mobile Phones Xpress Internet Services group will join the Location & Commerce business and will bring approximately 150 jobs to the city. Additionally, the company also plans to add 100 local tech jobs, pushing Nokia’s headcount in Chicago to nearly 1,500.

“Nokia’s growth in Chicago is a huge win for the city of Chicago and further testament that the technology space in the city is exploding,” said Mayor Rahm Emanuel. “More and more companies in this space are seeing that Chicago has the top talent available to help innovate and grow businesses in the coming years. I look forward to working with Nokia to extend Chicago’s leadership and growth, creating jobs and economic opportunity for years to come.”

The relocation of the Mobile Phones Xpress Internet Services group and the hiring of additional personnel for the Location & Commerce business will take Nokia’s overall presence in Chicago to encompass over 350,000 square feet of leased office space. The relocation of the Nokia team from Itasca to Chicago did not involve any financial incentives.

Mayor Rahm Emanuel earlier this year announced the City’s Plan for Economic Growth and Jobs, produced by World Business Chicago, which features 10 growth strategies for Chicago’s economy. One of the key points presented in the report is the attraction of new corporate, regional and divisional headquarters. The Nokia announcement marks the 10th headquarters move announced by Mayor Emanuel in his tenure.

La Casa Student Housing Development Opens in Chicago’s Pilsen Neighborhood

By Gabriel Circiog, Associate Editor

Governor Pat Quinn, representatives of The Resurrection Project and local legislators have announced the opening of the La Casa Student Housing development. Located in Chicago’s Pilsen neighborhood at 1818 S. Paulina St., the six-story residence hall offers students all the benefits of on-campus housing, including live in-resident advisors for ongoing academic support.

La Casa, which is closely located to public transportation and major highways, provides students with easy access to the major universities and colleges in the Chicago area. The development, which will house 100 students and five resident aides, also includes a resource center that features an onsite computer lab and academic advisors to offer career guidance and access to financial resources.

“La Casa is the world’s first community-based college dormitory designed to increase our young people’s likelihood of college success,” said Raul Raymundo, CEO of The Resurrection Project. “It was created for the commuting college student who is living at home in a two-bedroom apartment with no place to study other than the bathroom at two in the morning. It was created because we want all children in our community to know that a bachelor’s degree is not an option, but a requirement.”

In the pursuit of increasing access to higher education, the state provided over $8.4 million of the $12.2 million total project cost to construct the La Casa Student Housing development and resource center. The state’s grant funds were used to acquire the land and to cover costs associated with the design and construction of the residence hall and resource center. The first floor of the residence hall will feature various amenities including a fitness center, a retail shop and laundry facilities.

“Higher education is the key to improving our economy and preparing our students for the workforce of tomorrow,” said Quinn. “This new student housing development will provide more resources to students to help them as they pursue their degrees.”

Image Courtesy of: www.lacasastudenthousing.org