CHICAGO—Downtown parking garages don't come up for sale very often, but the Sterling Collection, a combination garage and retail property in River North, just hit the market, and although JLL officials, who will act as advisors to its owners, won't disclose how much they think it will fetch, they obviously have high hopes.
Much like its counterparts in New York, Los Angeles, San Francisco and Boston, “Chicago's downtown has a lack of supply when it comes to parking garages,” Matthew J. Berres, vice president of JLL, tells GlobeSt.com. And in River North, “there was already a limited amount of parking for its buildings, even before corporations and law firms began leaving the Loop and jumping over the river.”
The neighborhood has a vacancy rate of about 4%, and as a result, “this parking garage has been in very high demand," he says. "It has seen an average of 8% revenue growth over the past decade, and in the last 36 months, it has seen 12% year-over-year growth.” And the recent arrival of Motorola in the nearby Merchandise Mart will only further tighten the busy district.
Built in 2001, the property forms the base of a 389-unit condo tower at 345 N. LaSalle St. and consists of a 10-level, 598-space parking garage with 213,510-square-feet and 32,682-square-feet of retail space. CVS Pharmacy, 7-Eleven, Subway, Sterling Cleaners, and Untitled, a restaurant and nightclub, lease 100% of the retail space. The garage generates about 75% of the NOI, Berres adds.
Sterling has another quality that sets it apart, he says. “The majority of garages see a drop off on the weekend, but here, due to its close proximity to popular restaurants and nightclub, it does extremely well.”
“This is a very competitive and highly sought after class of property,” Berres adds, both because of the steady cash flow, and due to the low velocity for similar structues. “It's very seldom that you see multiple garages trading in a single year.”
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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.
