However, Younan Properties Inc. hopes to add another one million sf in suburban office assets to its portfolio. "We have a good pipeline of deals we're looking at," chairman and chief executive officer Zaya S. Younan tells GlobeSt.com. "During the last three months, we've seen significant activity in buildings coming to market."
Occupancy at the seven-story, 140,196-sf asset across Meacham Road from Motorola's corporate headquarters is 75%, with ConAgra, Bakemark Ingredients, Tellabs and Bechtel Corp. among the tenants. San Mateo, CA-based Glenborough Realty Trust sold the building for $82 per sf.
"It's not as a big a building as we may have liked, but it's institutional quality. Historically, it's been owned by institutions," Younan tells GlobeSt.com.
Most recently, however, it was managed in-house by Glenborough Realty Trust, with asking lease rates of $22 per sf. One immediate change is hiring Trammell Crow Co. senior vice presidents John Clark and Rob Lundin, Younan tells GlobeSt.com.
Vacancy in the 27.4-million-sf Schaumburg submarket has dropped to 11.8%, but 13.7% when sublease space is factored in, according to Delta Associates. That is down from 15.4% in 2003, according to the research arm of Transwestern Commercial Services, which increased its suburban holdings with its acquisition last year of Great Lakes REIT.
"We feel we've invested in the market at the right time," Younan says. He tells GlobeSt.com there has been office employment migration, particularly from Downtown to the Northwest suburbs, as well as significant growth by existing tenants.
CB Richard Ellis senior vice president William Novelli and first vice president Mark Hellwig handled negotiations for Glenborough Realty Trust. The sale leaves the REIT with two assets in the area---a 474,426-sf industrial property in West Chicago leased to Navistar as well as the 232,052-sf Oakbrook Terrace Corporate Center III. Also this year, it shed the 146,530-sf Columbia Center in Rosemont.
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