CHICAGO—Shopoff Realty Investments, a national manager of value-add real estate investments, recently acquired two creative loft commercial buildings on the outskirts of downtown. And officials from the Irvine, CA-based firm believe that in these rising neighborhoods, it is possible for even well-leased properties like these to generate significantly more revenue.
The properties are located at 900 N. Franklin St. and 224 N. Desplaines St. in the River North and West Loop neighborhoods, respectively. The Franklin building has 87,270 square feet and at acquisition had an occupancy rate of 89%. The other has 76,729 square feet and had an occupancy rate of 92%.
“It's like the meatpacking district in New York City, if you went back eight or ten years,” William Shopoff, chief executive officer of Shopoff Realty Investments, tells GlobeSt.com. And to the company, that means opportunity. “Both properties are located in prestigious Chicago neighborhoods and currently renting at 30% below market rates.”
Shopoff adds that they plan to refresh the interior of the Desplaines building and “enhance its cool factor.” They will also do both exterior and interior work on the Franklin location and “jazz up the common areas.” The company is still in the design phase of this work, which could take 18 months or more.
But Shopoff has already renewed one lease and signed a new tenant, both at rental rates substantially above what other current tenants pay. He likes that each building has a diverse tenant base, and “would love to have them stay, but they need to understand that the market they're in has been changing.”
Shopoff Realty typically buys properties with the aim of holding them for about three to five years, he adds, “and we expect to do that here.”
CHICAGO—Shopoff Realty Investments, a national manager of value-add real estate investments, recently acquired two creative loft commercial buildings on the outskirts of downtown. And officials from the Irvine, CA-based firm believe that in these rising neighborhoods, it is possible for even well-leased properties like these to generate significantly more revenue.
The properties are located at 900 N. Franklin St. and 224 N. Desplaines St. in the River North and West Loop neighborhoods, respectively. The Franklin building has 87,270 square feet and at acquisition had an occupancy rate of 89%. The other has 76,729 square feet and had an occupancy rate of 92%.
“It's like the meatpacking district in
Shopoff adds that they plan to refresh the interior of the Desplaines building and “enhance its cool factor.” They will also do both exterior and interior work on the Franklin location and “jazz up the common areas.” The company is still in the design phase of this work, which could take 18 months or more.
But Shopoff has already renewed one lease and signed a new tenant, both at rental rates substantially above what other current tenants pay. He likes that each building has a diverse tenant base, and “would love to have them stay, but they need to understand that the market they're in has been changing.”
Shopoff Realty typically buys properties with the aim of holding them for about three to five years, he adds, “and we expect to do that here.”
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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.
