CHICAGO—A vast array of Chicago-area properties went into foreclosure during the recession and its aftermath, and bank-owned sales became quite common. But real estate professionals that handle many of these transactions tell GlobeSt.com that a shift has taken place. In the past, speculators that smelled bargains snapped up many of these properties. But today the gathering economic recovery means it is far more likely that developers or owner-occupiers want to take over this real estate.
“You've got a wider pool of buyers and investors,” says John R. Homsher, a principal with Podolsky|Circle CORFAC International in suburban Riverwoods. For example, along with Alissa Adler, principal, he represented a regional bank in the $1,288,000 sale of 17W240 22nd St., a vacant 24,000 square-foot office building in Oakbrook Terrace, IL. This well-located building would have been a great pick-up for a speculator, “but we sold it to a user.”
The purchaser was represented by Jackie Salman of Cabanban, Rubin & Mayberry Commercial Realty.
“We had several speculators who looked at it and their prices were significantly lower,” Homsher adds. The new owner, a private investor, will occupy about 5,000 square feet and plans to lease the remainder of the space to other tenants.
This property has a lot in common with other bank-owned sales handled by Homsher and Adler in that the real estate itself was not really distressed. The previous owner had occupied most of the space but financial troubles meant it could not service the debt on the building. Other tenants that had short-term leases left because they could not be sure who the new owner would be.
“This asset's flexible floor plans and suite sizes provide a unique ability for an owner/user to create cash flow,” Homsher says. “Its proximity to I-88 and I-294 as well as Oakbrook Center and other retail amenities, along with signage on 22nd St. viewed by 44,000 vehicles daily, will serve to accelerate the lease up of the building and will benefit future tenants.”
Constructing a new building of the same quality would have cost roughly $150 per square foot, but this one was only about $54 per square foot. “It was a good deal for the bank and a fair deal for the buyer.”
Homsher and Adler also recently completed the sales of two bank-owned land parcels in Chicago, and both ended up going to developers. And of its other recent transactions involving bank-owned buildings, “in all cases they were sold to owner-occupiers who wanted to expand. So we're back to a more stable market. People are feeling comfortable about their businesses and what they see down the road.”
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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.
