The former manufacturing facility was converted to office use in the 1990s.
CHICAGO—Everbury Partners, a limited partnership managed by J. Michael Drew, founding principal of Chicago-based Structured Development, recently sold 1333 N. Kingsbury St., a four-story, 100,000-square-foot loft office building in Chicago's Clybourn Corridor. A unit of Zurich, Switzerland-based Credit Suisse Group paid $27.8 million for the property, or $278 per square foot. Investors from around the world have been eagerly buying up the CBD's top office properties for years, but this deal illustrates that many are also looking for deals in outlying neighborhoods.
“What's happening in Chicago is that institutional buyers have recognized that these loft buildings are the new cool spaces that tech companies are really attracted to,” Drew tells GlobeSt.com. He points to prominent examples such as Google, Groupon, and Quicken Loans, all of which “have gone into repurposed, former industrial buildings that have large floor plates and high ceilings.” Buyers will pay to gain access to these credit tenants, as well as the cash flow and cachet that goes with loft office properties.
This is the second time in less than a year that Drew has sold an office property in the Clybourn Corridor to an overseas investor. In spring 2016, a Structured-led group sold Blackhawk on Halsted, a 224,000-square-foot retail and medical office property at 1460 N. Halsted St., to a German investment fund.
Drew purchased 1333 N. Kingsbury in 1991 when it housed manufacturing operations for Peppers Waterbeds. He converted the building into a multi-tenant loft office building that, at the time of this sale, was 95% leased. Current tenants include college sports recruiting firm National Collegiate Scouting Association, which occupies 38,000 square feet; and recruiting and staffing firm TrueBlue, which occupies 30,000 square feet.
“The area now has tremendous amenities,” Drew adds, and those working there have an access to restaurants, retail and entertainment that rivals downtown. Structured Development, for example, recently completed the NEWCITY retail and residential complex at Halsted St. and North Ave., just a few blocks from the Kingsbury property. In addition to 199 luxury apartments, NEWCITY houses the area's only Mariano's grocery store and an ArcLight movie theater.
The value of property in the neighborhood could increase further if the city changes the local zoning policy. Factories and tanneries once lined the Chicago River, which flows through the Clybourn Corridor, and in the 1980s, Chicago created an industrial corridor for the surrounding area that was meant to preserve and even expand the number of manufacturing jobs.
However, heavy industry continued to decline, and Drew believes the effort to preserve manufacturing conflicted with the needs of employers that wanted to bring in jobs related to information technology, service and retail. Manufacturers used the river to transport raw materials, but “now the river has been recognized as an amenity for Chicago.”
The river is cleaner now than in the last 100 years, and future clean-up efforts could turn it into a true recreational body of water. The city will present its recommendations on zoning changes this spring, Drew says, and he hopes that will help unlock hundreds of acres for new development.
“We've been actively developing in this area for the past 15 years,” he adds, “and it's gratifying to see how our projects have helped spur an incredible revitalization of the neighborhood that is recognized locally, nationally and internationally.”
Cody Hundertmark and Blake Johnson of CBRE represented Everbury Partners in the transaction.
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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.
