CHICAGO—It's well known that portions of the suburban office market remain in the doldrums. But at the same time, the best class A properties have been attracting marquee tenants and commanding solid rents since the recovery began. Therefore, some suburban owners have decided now is the time to make sure their properties can distinguish themselves from competitors in the market.
A partnership between Romanek Properties, Bachmann Associates and Syndicated Equities, for example, recently received a $19.63 million refinance for its 400 Skokie Blvd. in Northbrook, a 195,000 square foot class A office facility. And the owners have decided to dedicate $2.53 million from the deal to a capital building program that will improve its amenities and boost occupancy.
"There are a lot of commonplace buildings in this market," CBRE's Dan Graham tells GlobeSt.com. "A tenant looking for about 5,000 square feet can see 25 spaces," many of them rather tired. "It's mind-numbing to go on a tour and see 20-year-old offices." Graham and his colleague Peter Clifton lead leasing efforts for the owners of 400 Skokie.
"Our goal is to elevate this property in all respects," he adds, "and the refinance will allow us to do that." Occupancy is currently in the 70s.
Much of the work has already begun. Tenants will see new light fixtures and carpeting, improved common areas, an upgraded fitness and conference center with state-of-the-art technology, and a refurbished lounge called 400 Cafe. With its big-screen TVs and WiFi, "it will have more of a downtown feel," says Graham.
“The suburban market has been a very positive story the past several years and we feel the momentum it has built will carry over into the foreseeable future,” says Clifton.
According to CBRE research, since the beginning of 2012, the suburban market has posted 3,817,227 square feet of positive net absorption versus the CBD market total of 1,904,948 square feet in that same period. Jobs have been a positive trend as well, as the suburban market has accounted for 74% of the region's job growth since 2011, adding 72,111 office jobs.
Bill Barry and Bill Stewart of Draper and Kramer arranged financing for ownership. The lender was Prime Finance.
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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.
