BY THE NUMBERS
CHICAGO—Chicago's CBD office market has undergone a significant transformation over the past two decades, according to a new report from MBRE. The total office inventory has increased by more than 10 million square feet since 2004, while the class C inventory has shrunk by over 10 million square feet during the same time period. In 2004, the CBD office inventory was equally distributed between class A, B, and C properties; it is now 41% class A, 35% class B, and only 24% class C. In Chicago's CBD, class C buildings have traditionally been vintage office buildings constructed before 1940 and “loft” offices in industrial and warehouse buildings that have been adapted for reuse. And many, have been converted into residences or hotels. The Hyatt Centric at 100 W. Monroe, for example, was converted from a 130,000 square foot office building that was built in 1927.
NEWS & NOTABLES
CLEVELAND—Bellwether Enterprise Real Estate Capital LLC, the commercial and multifamily mortgage banking subsidiary of Enterprise Community Investment Inc., had a strong finish to 2017, with an estimated $6.3 billion in loan volume and a servicing portfolio in excess of $17 billion. This included the closing of approximately 825 loans for commercial and multifamily properties in key markets across the US. Notable moves this year include a major West Coast expansion in March 2017, with the addition of 23 new hires across three offices: the newly-formed Los Angeles office and the existing Irvine and San Diego offices. The total loan volume was $1 billion higher than 2016—a 19% increase—with the total number of loans closed increasing by more than 100 over the previous year. “Our anticipated results for 2017 reflect not only the incredible work of our team nationwide, but also industry-wide growth, spurred by low interest rates, widely available capital through traditional funding sources, and low yields on alternative investments,” says Ned Huffman, president of Cleveland-based Bellwether. “Together, these forces boosted demand for real estate investment, providing us with an opportunity to draw on the depth and breadth of our expertise to close on a record year.”
DEALTRACKER
RICE LAKE, WI—The Boulder Group, a net leased investment brokerage firm, has completed the sale of a single tenant net leased Shopko property located at 320 South Access Road in Rice Lake, WI, about 60 miles northeast of the Twin Cities, for $6,378,560. The 88,004 square foot property is close to multiple residential communities, local businesses and schools in Rice Lake, the shopping, industrial, educational, and medical hub for many surrounding communities. National retailers located nearby include Walmart Supercenter, Kohl's, Menards, Hobby Lobby, and many others. Randy Blankstein and Jimmy Goodman of Boulder represented the seller in the transaction; a publicly traded real estate investment trust. The purchaser was a Midwest based real estate investment group. Green Bay, WI-based Shopko has 18 years left on its lease.
BUILDING BLOCKS
CHICAGO—In Chicago, office demand is spreading from the CBD into areas like the recently rezoned North Branch Industrial Corridor, a 760-acre stretch of land where high-rises are expected to replace smokestacks thanks to newly adopted land-use guidelines that allow for a mix of residential and commercial uses. In anticipation of the change, Chicago-based Baker Development Corporation is converting a former industrial building at 2017 N. Mendell St. into a 62,000-square-foot class A office building, complete with a rooftop deck. Scheduled to deliver in early 2018, the riverfront development will help users establish a presence near the emerging Lincoln Yards mixed-use district, one of the proposed sites for Amazon's HQ2. “This location provides tenants with an attractive value proposition, allowing them to enjoy state-of-the-art office space on par with submarkets like the West Loop and River North, but at a 25 to 30% savings due in large part to our lower tax basis,” says Dan Slack, principal at Baker.
CHICAGO—J.C. Anderson, Inc. has just completed a renovation of the Levy Family Partners, LLC's new 20,000 square foot space on the 19th floor of Chicago's River Point development at 444 W. Lake St. The Levy firm was started by entrepreneur Lawrence F. Levy, co-founder and chairman emeritus of Levy Restaurants and chairman of the board of Del Taco Restaurants, as the holding company for his family's investments in real estate partnerships, restaurants, securities, and private businesses. The company is relocating from 444 N. Michigan Ave. Its new space has a mix of open workspaces, executive offices and a large conference room. It also features river views, Ardex concrete flooring, glass front office space, millwork, high-end AV components and modern finishes throughout. The construction team was led by Anthony Douglas, Anderson's project executive, Adam Scheitel, assistant project manager, and Mark Zawadka, superintendent. Eastlake Studio provided architectural services and Kent Engineering provided engineering. Holly Duran Real Estate Partners LLC represented Levy Family Partners in the transaction.
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