More than two years after locking in a big profit on a medical office and life science research campus north of Chicago, a local developer is putting the final building and development land up for sale.
American Landmark Properties has hired JLL brokers to sell a lab building that is being redeveloped within the Illinois Science & Technology Park in Skokie, Illinois, along with adjacent land, according to marketing materials from the brokerage.
It is going on the market following sluggish 2023 property sales volume across the country because of rising interest rates and other factors. Yet, medical offices and biotech research properties in many cases have overcome those challenges.
The 135,851-square-foot lab building at 8030 Lamon Ave. has undergone renovations on speculation, or without tenant commitments, and there is now a letter of intent to be 35% preleased, according to JLL.
The offering also includes nearly 9 acres of development land, under which in-place zoning would allow for almost 1.3 million square feet of new buildings, along with parking and the opportunity to collect recurring administrative revenue from the 22.6-acre campus.
It’s unclear how much the Skokie-based developer expects in a sale, and the firm did not immediately respond to a request for comment from CoStar News. The lab redevelopment at 8030 Lamon cost $20 million, according to the JLL brochure.
The deal is a chance to extend a series of deals that already appear to have made American Landmark’s acquisition of the campus for just over $77 million in 2017 a highly profitable one.
It has sold off portions of the campus for more than $111 million combined in two separate deals in late 2021. American Landmark sold neighboring life science research buildings at 8025 and 8045 Lamon to Chicago-based Singerman Real Estate for over $75 million, then locked in a profit by selling a medical office building at 4901 Searle Parkway to Florida-based TopMed Realty for $36.2 million.
Investors, including a partnership of Remedy Medical Properties and Kayne Anderson Real Estate, have been on an extended run of property acquisitions in the sector. Many investors like medical offices and research facilities because it is costly for tenants to relocate, meaning there is a strong chance of keeping tenants as leases near expiration.
Excluding the 8030 Lamon building that is under redevelopment and for sale, the Illinois Science & Technology Park is 93.4% occupied, with an average occupancy of 93.5% since 2011, according to JLL.
Tenants on the campus include Northwestern University life science incubators and NorthShore University Health System offices.
The campus began as a research hub and headquarters for drugmaker G.D. Searle, now a subsidiary of Pfizer.
American Landmark is a longtime owner of real estate in the North Shore area of Chicago’s suburbs. The firm also is known for previously owning a stake in Chicago’s tallest skyscraper, the 110-story Willis Tower. That firm and New York investors Joseph Chetrit and Joseph Moinian sold the former Sears Tower to Blackstone for $1.3 billion in 2015.
For the Record
JLL brokers Sam DiFrancesca, Patrick Shields, Dan Reynolds and Jaime Fink are representing the seller.