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Greater Tenant Diversity Coming to LaSalle Street

CHICAGO—The arrival of hotels and nightlife has made the neighborhood more desirable to tech firms, say the new owners of the historic One North LaSalle.

By Brian J. Rogal | brianjrogal | | Updated on March 09, 2016

 

chi_onenorthlasalle The previous owners completed a great deal of work on the 1929 building’s infrastructure.
CHICAGO—As reported yesterday in GlobeSt.com, a joint venture of Hilco Real Estate and two top executives at MBRE have bought the historic One North LaSalle building in the Central Loop. The partners say the time is just right to launch a multimillion-dollar renovation that will help boost the profile of the 1929 Art Deco office tower.   “I have been involved with this building for 17 years,” Kevin Purcell , executive vice president, chief operating officer of MBRE and one of the partners, tells GlobeSt.com, first as a property manager and then as an adviser to ownership. “I have seen a transformation take place in the Central Loop. It’s become a 24/7 neighborhood. It’s a new Loop.” Perhaps the most profound change has been the arrival of several hotels on the street, which means LaSalle is no longer like a ghost town in the evening. Kimpton Hotel & Restaurant Group has transformed 39 S. LaSalle into a hotel, a Residence Inn by Marriot is at 11 S. LaSalle, and a new Hyatt Place is several blocks away. “Right there, you have 1,000 hotel rooms that were not there just one-and-a-half-years ago.”    “We are looking to change the feeling of the building,” adds Roberto Perez , executive vice president at HRE, by refurbishing its lobby and corridors, plus adding a tenant lounge, conference center and other amenities on the 25 th floor. They are still working to finalize the scope of the project, but want to begin work as soon as possible.    “It’s become the norm to have these types of amenities,” says Purcell, primarily because downtown office workers are spending more time at work. Landlords that want to compete will make sure that employees have some way to blow off steam during their extended workday. “The past two owners have invested a significant amount of money into the bones and infrastructure of the building,” which will allow HRE, Purcell and Peter Westmeyer , the other partner from MBRE, to concentrate their energy and money on the amenity side.    The centerpiece of the renovation will be a south-facing rooftop deck and terrace, a perk that several other historic towers in the neighborhood, such as the nearby CBOT Building, will also have. When completed, Purcell says, “on a beautiful day like today, you could be sitting outside and having a meeting.” Perez says the new owners will be looking to secure a more diverse tenant base, including firms in IT, advertising, and marketing to go along with the traditional occupants of the Central Loop such as law and financial firms. The building should generate more in rent when the transformation is complete, but just how much of an increase is tough to say, since the market has already picked up for class B buildings in the submarket.   Gary C. Epstein , executive vice president and chief marketing officer for Hilco, says “we have been doing deal across the country, but we are especially excited about this one because it is in our hometown.”

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