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DARIEN, IL-Triple Net Properties LLC, based in Santa Ana, CA, has acquired the Darien Business Center, which consists of four office buildings at 7955, 8141, 8201 and 8205 S. Cass Ave. Triple Net acquired the business center on behalf of tenant-in-common investors from SMII Oak Creek/LP LP, which is a subsidiary of KBS Realty Advisors, says Dan Prosky, managing director for healthcare properties for Triple Net.
The sales price was not disclosed but was reportedly $29 million, or about $165 per sf. A cap rate was not disclosed. Gary Nussbaum, with Transwestern, represented the seller. La Salle Bank NA provided the financing for the sale, which was arranged by Kirk Danley and Eric Tupler, both with CBRE | Melody.
The property consists of four office buildings, constructed between 1981 and 1990, that have a total of nearly 176,000 sf, in addition to a 1.7-acre parcel of undeveloped land. The office space is currently 97% occupied. University of Chicago Health Systems is the largest tenant in the business center, leasing about 35% of the center's space, Prosky says. Other tenants include Viskase Cos. Inc., Insure.com Inc. and Eichrom Technologies Inc. The lease rates vary by building but the company works at “roughly between $17 per sf to $21 per sf gross base,” Prosky says. “Our rents are substantially below what most of some of the newer buildings are asking, which is typically between $15 per sf and $18 per sf triple net,” he added. The business center is in the East West Corridor submarket which “has very few large spaces that could accommodate the needs of our tenants,” he says. “We think there is very little chance of them wanting to relocate.” The submarket also has a lower vacancy rate than the Chicago market as a whole and has positive net absorption.
The business center is located near Interstate 355 and Interstate 55 and is less than one mile from the Argonne National Laboratory. Besides its location, Triple Net liked the “very strong tenant roster” and that, when they interviewed the tenants, “all the tenants expressed very strong satisfaction with the building, the location [and] very high likelihood of renewal,” Prosky says. Triple Net will do some upgrades to the property such as carpeting, paint and work on the elevators and heating and ventilation system. Triple Net has not decided on whether the firm will sell or develop the 1.7-acre parcel of land and will do “whatever makes the most sense,” he says. The typical hold time that Triple Net has for properties is between five and 10 years.
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