CHICAGO, IL- HFF announced on Wednesday that the firm had closed the sale of Greenspoint Office Park, three Class A office buildings with 498,635 SF in Hoffman Estates. LPC Realty Advisors, on behalf of a pension fund, bought the development from Multi-Employer Property Trust for $23.5 million.
Bentall Kennedy was an advisor to MEPT. The HFF team that represented MEPT was led by Senior Managing Directors Jeff Bramson and Jamie Fink and Director Mark Katz.
The city of Chicago's CBD has received a lot of attention lately for its success in attracting new businesses, many of them, such as the Motorola division of Google, from the suburbs. But Katz told GlobeSt.com that the Greenspoint deal and others like it show that the Northwest suburban market also has strength.
“I think the Northwest suburbs had a pretty incredible year,” he said. Depending on which data set used, the submarket had about 900,000 SF of net absorption in 2012, he added. The possibility of a regional movement toward the CBD has been “overblown. Clearly, there are companies that are going downtown and should be downtown. My office is downtown, I get it.” However, many companies “need that dual-income family that the suburbs provide. Baxter is not moving to the city. Abbott is not moving to the city.”
The new owner does have a challenge. Several large Greenspoint tenants, such as Safeco Insurance, moved out over the last few years and the development is only about 53 percent occupied. But the plummeting occupancy rate does not reflect on Greenspoint's quality, according to Katz. Safeco, for example, was acquired by Liberty Mutual in 2008, and had to move when the latter chose to consolidate operations. “They all moved out within 18 months of each other in the middle of a recession. It was a tsunami.”
Furthermore, he points out that Greenspoint has many attractive features. At 12-stories, Greenspoint I is the tallest building around the busy I-90 and Barrington Road intersection, and a perfect place for a very visible corporate logo. All of the structures have the most advanced features, including a LEED Gold or Silver certification. “It's really nice product in a really nice building in an improving market.”
Tenants that remain include Vistex, Inc., Siemens and Kimberly Clark.
Although developers have not launched a round of new construction in the submarket, Katz said that leasing activity and rental rates have increased recently. “And I think that will continue.”
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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.
