More Office Upgrades Coming to the Suburbs
Upgraded properties will compete with top A product, but also offer tenants a discount.
CHICAGO—Well-located suburban properties in the Chicago region continue to draw in investors from around the country who can sense opportunities. Stanton Road Capital, LLC, a Los Angeles-based real estate investment firm, recently acquired Arbor Lake Centre, a 228,000 square foot class A office building located at 1751 Lake Cook Rd., at the confluence of I-94 and I-294 in Deerfield. The property, developed in 1986, was 75% leased at the time of acquisition.
“It’s a true class A asset but right now lacks amenities,” Tim Ronan, Jr., founder and managing partner of SRC, tells GlobeSt.com. “It’s been owned by the same owner since the mid-80s,” and it needs a capital infusion.
SRC is focused on buying properties in Southern CA, TX and major markets in the Midwest, especially ones that can be picked up for prices that allows the company to invest significant amounts of post- acquisition capital. Ronan estimates they will spend more than $6 million to lease up and add amenities to this latest acquisition. “We plan to do a complete modernization of the fitness facility,” he says, build-out a tenant Wi-Fi lounge, install a grab-and-go fresh food service, and overhaul the building’s lobby and common areas. “It will be a well-amenitized, institutional asset.”
And the relatively low purchase price means tenants will find offices that compare favorably with other class A buildings in the area, but at a $6 to $7 discount, Ronan adds. “It will be above and beyond the class B offices in the North Suburban market. But you have groups that can’t afford to pay $36 gross. We think this will be a great alternative for folks in-between.”
A diverse group of tenants including L’Oreal, Miller Cooper, AXA Equitable, and Personal Staffing Group, currently occupies the six-story property.
“Arbor Lake Centre is a property we have tracked closely over the last six months,” he says. “The location and access have always been the strengths of this property. With our planned upgrades to the building amenities and common areas, we feel that the asset will be very well positioned to continue to retain and attract high-quality corporate tenants.”
Colliers International will serve as the leasing agent and property manager for the building. CBRE facilitated the sale transaction.