CHICAGO—Chicago-based Golub & Co. has just put down another bet on the metro region's office market. The real estate investment and development firm has acquired International Tower, an 11-story, 302,000-square-foot building at 8550 W. Bryn Mawr Ave. in Chicago near O'Hare International Airport. The price was not disclosed, but Cook County property records indicate that Golub paid $40.9 million.
The property has a few things in common with Oak Brook Executive Plaza, a 389,000-square-foot office complex in west suburban Oak Brook that, as reported in GlobeSt.com, Golub recently purchased with its partner Alcion Ventures. Both are older properties far outside the CBD with occupancy rates around 90% and are in vibrant submarkets.
"Our suburban investment strategy is focused on well-located properties that have outperformed the broader market in terms of occupancy and offer attractive income growth opportunities," says Michael Newman, president and chief executive officer of Golub. "International Tower aligns with this strategy, offering occupancy in excess of 90% and stable rental income."
This sale seems especially significant for the local office market. International Tower was just one of many office properties in the area with an owner that fell into financial difficulties during the recession. According to Cook County records, the property was bought earlier this year from a loan servicer by Dallas-based Lone Star Funds for a little more than $30.2 million.
But the O'Hare office market has experienced a strong surge of leasing activity in recent months, with the vacancy rate dropping 190 bps in the past six months, according to a recent report from Colliers. And at the end of the third quarter, the direct vacancy in the submarket fell to 18.9% percent, and the class A vacancy rate dropped to 15%, according to a report from CBRE. Net absorption reached 238,972-square-feet year-to-date, with 151,018-square-feet taking place in the third quarter, CBRE reports.
"The recovery of the suburban Chicago office market has been slow, but we've seen an acceleration in activity this year, particularly in the areas most desired by tenants—high quality, well-positioned buildings in O'Hare and Oak Brook," adds Adam Short, vice president of acquisitions with Golub. "As the market continues to firm up, International Tower is well-positioned to achieve strong income growth."
Golub was represented in the transaction by Newman, Short and Michael Goldman.
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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.
