CHICAGO—Officials from Transwestern's Chicago office say they have just facilitated through an auction a 15-year sale-leaseback of the Chicago Loop's 175 W. Washington St., a 20,305 square foot building occupied by the National Museum of Health and Medicine Chicago, to an undisclosed buyer. Transwestern managing directors Marc Imrem and Andrew Watson represented NMHM in the transaction and found that securing a buyer for a property occupied by a nonprofit museum presented a few challenges.
“We began to market it in a traditional manner,” Imrem tells GlobeSt.com, and several REITs were very interested in a 15-year lease located in the heart of downtown. However, once these groups did the underwriting, they backed out. “We had that happen twice. The nonprofit museum is a startup with no real revenue or operating history,” and therefore, “it didn't meet their parameters. In order to overcome the lack of credit, we brought the asset to auction, enabling NMHM to achieve maximum value while ensuring a successful close.”
In an auction, all the necessary due diligence gets done before the actual sale and the winning bidder signs a contract right after the process is complete, he says. The price paid by the buyer was not disclosed. The museum plans to use the proceeds for needed repairs and improvements to its facility, which it purchased in 2010, according to Cook County records.
“Interest was never the issue,” Imrem adds. “Everyone was interested,” especially because the new owner will receive a good strong rent for the space. And even though it's possible the museum won't remain long-term, the building would still have many lucrative options. It has about 7,000 square feet of ground-floor retail, which Imrem estimates could garner about $50 per square foot, and the upstairs, which includes an auditorium with a balcony, could make an interesting office space that would bring in about $12 to $15 per square foot. “It always looked like a good space for a tech company or a law firm.”
Still, Imrem says “I do believe in the museum and in its mission, and I believe it will stay there for a long time.”
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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.
