CHICAGO—Last week, GlobeSt.com reported that REDICO, a Michigan developer and investor, had bought 10 N. Dearborn, a historic 11-story downtown tower. And today, Suzanne Martinez, principal with Avison Young's capital markets group in Chicago, tells GlobeSt.com that the offering attracted a surprising amount of interest, and illustrates just how active and vibrant the downtown office market could get in 2014.
“We got a tremendous response and did a ton of tours,” she says. Most surprising for an 80,288-square-foot offering, Avison got inquiries not just from local and regional players, but from institutional investors and even from overseas. “It created a lot of competition. There were even people working in hotel renovations taking a look at it.”
According to Cook County property records, the new owners paid $10.5 million. The building was completed in 1923 and became the Covenant Club, a Jewish men's club, which provided its members, many of whom could not gain admittance to other downtown clubs, a swimming pool, running track, bowling alley and formal dining and ball rooms. The club closed in 1986, but the wide variety of uses the building was put to in that era means each floor is unique, making it especially attractive to creative users.
“River North is beginning to fill up so everyone's beginning to look outside River North,” Martinez says. The building already includes the headquarters of Two by Four, a Chicago ad agency. “There's just a lot of character to it,” Martinez says.
The location's desirability, and the likelihood of finding solid tenants, even made the relatively high vacancy rate, about 30%, yet another of its selling points. Any new owner, it was felt, might want to put their own tenants and leasing program in place. The sellers did, however, lock in their building's landmark restaurants, Trattoria No.10 and Sopraffina, to long-term leases before going to market, thereby strengthening the retail component.
“The sellers got a great price for it, and the buyers got a great opportunity to make their mark.”
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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.
