ELGIN, IL-A Los Angeles-based investor has acquired a 128,000-square-foot office building in suburban Chicago that is net leased to Verizon Wireless until 2017. The high-net worth individual bought the four-story building from Stonewater Partners for $11.2 million.

The buyer used proceeds from a 1031 exchange out of a multifamily property in California, according to Craig Tomlinson of Stan Johnson Company. He represented the investor in the acquisition, while Steve Buss, Tom Holtz, Ryan Watts and Mike Caprile of CBRE’s Minneapolis office represented Stonewater in the sale.

“The investor wanted a property with an investment grade rating, but was unwilling to invest and get the kind of yields when you buy a 25-year, net leased Walgreens,” Tomlinson tells GlobeSt.com. “He wanted a 10% return on his money, and in order to get the yield he wanted, he had to accept a shorter lease.”

The building, located at 777 Big Timber Rd., was the last asset to remain in Stonewater’s flagship fund, which it launched in 2003. The firm acquired the property in 2004; in total, the fund acquired 1.4 million square feet of single-tenant assets throughout the US for $111 million. All the properties in the fund generated a 40+% IRR, according to Jeffrey Toporek, a principal with the firm.

During Stonewater’s hold period, the Mount Kisco, NY-based firm was able to renew Verizon twice. The building serves as a major call center operation for the company. “The building has a very long history of being occupied,” Toporek tells GlobeSt.com. “Investors were attracted to tenant’s credit, but also the tenant’s long history at the property. The expectation is that the tenant will continue to be there.”

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