CHICAGO, IL- When Transwestern announced this week that they had just taken over leasing for the 16-story office tower at 525 West Van Buren, the firm's agents knew they had a challenge.
“This is really going to need a full-scale repositioning and marketing effort,” Executive Vice President Michael Lirtzman told GlobeSt.com. Lirtzman, along with Tamara Kos and Kristen Baker, will handle the leasing.
Known as Congress Center, the 522,000 SF building was in chaos last year. The owners' lenders claimed they were in default on a loan for the building and some tenants complained the owners owed them money. As a result, the vacancy rate went over 25 percent even though the building is only 11-years-old and stands in the downtown's hottest market for office space.
Late last year, however, a joint venture consisting of Northwood Investors LLC, a real estate investment adviser based in New York, and Sovereign Capital Management Group Inc.'s American Recovery Property Trust, bought it for $95 million.
But a turnaround will take more than simply changing owners and leasing agents.
“Right now, it's not on a lot of brokers' radar screens as a possibility,” said Lirtzman. Transwestern will have to spend a lot of time reintroducing the property and establishing its identity. The new owners will make that easier since they have more to spend than the previous group, Lirtzman added. In addition to upgrades like a rooftop deck, they plan to hire a group of architects to redo the lobby and other public areas. “The best marketing for us will be to get people into the building to see it, physically bringing people in to see the quality. What I call hand-to-hand-combat.”
Lirtzman said Transwestern has done turnarounds at other buildings. Still, the Congress Center effort may be unique. Unlike many properties in need of a turnaround, which tend to be older and require significant repairs, the center is almost new and has all the conveniences modern office workers expect.
Furthermore, “when this building went up, everyone thought of this [neighborhood] as a pioneering area. Now it's got all the amenities.”
“The reputation has suffered in the past few years even compared to lower quality buildings. We need to restore it to its proper place.”
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
