A Chicago developer wants to buy a former Walgreens Boots Alliance office campus in the suburbs and demolish the buildings for a mixed-use development in a planned entertainment district, the latest project nationally that would repurpose sprawling, outdated corporate complexes.
LG Development Group has a preliminary deal to buy the six-building campus between Lake Cook Road and the Edens Expressway in Deerfield, Illinois, according to someone familiar with the deal. LG Development still needs zoning approval from the north suburban village before completing the purchase, so the sale by Orion Office REIT still could fall apart.
The deal for the 37.5-acre campus is the latest potential major change for a decades-old former office campus, a trend already playing out in other suburbs north of Chicago as well as throughout the country.
Not far away, Dermody Properties is in the process of demolishing Allstate’s former 232-acre campus in Glenview, Illinois, and replacing them with modern logistics buildings.
Even closer, Bridge Industrial wants to take on another office-to-industrial conversion on Baxter International’s 101-acre campus in Deerfield. After encountering stiff opposition from neighbors, the developer withdrew a request to have the land annexed into Deerfield as it sought zoning approval, instead stating its case to Lake County zoning officials.
Walgreens earlier this year put a large portion of its headquarters campus, which runs alongside the Orion-owned buildings that the drugstore chain no longer uses, on the market for sale in another potential redevelopment play. Walgreens, which also has a large office in Chicago’s Old Post Office, plans to remain on a portion of the longtime headquarters campus in Deerfield.
Conversions to modern warehouses are a common theme throughout the country as demand for offices have fallen and logistics demand has risen since the onset of COVID-19.
Offices have given way to other uses, including new training facilities for two NFL teams in California, the Los Angeles Rams in Inglewood and the Los Angeles Chargers in El Segundo. Meanwhile, a mixed-use redevelopment is envisioned for a Toys R Us’ former 193-acre headquarters in New Jersey.
Proposed Entertainment District
In the latest potential Chicago-area redevelopment, Phoenix-based Orion has a deal to sell the buildings where Walgreens has stopped using space, with rent payments set to end at the end of August, according to Deerfield documents.
The documents are part of an outline by Deerfield officials for an entertainment district the village wants to create on the land Orion is selling.
Deerfield’s village board recently voted to create an entertainment district that could include uses such as live entertainment, bars, restaurants, golf driving ranges, miniature golf, breweries, skating rinks, bowling alleys and movie theaters.
Deerfield Assistant Village Manager Andrew Lichterman told Crain’s Chicago Business, which first reported LG’s deal to buy the site, that the village has not received any former proposals for the site. He told the publication that the new zoning was created to provide guidelines for potential allowed uses.
Specific development plans still would require village zoning approval.
Representatives of the village, LG and Orion did not respond to requests for comment from CoStar News.
LG is known for residential developments throughout Chicago, and it’s possible the Deerfield project could include apartments.
The buildings, constructed in the 1970s and ’80s, are at 1411, 1415, 1417, 1419, 1425 and 1435 Lake Cook Road.
It’s unclear how much LG has offered to pay for the Deerfield buildings. In a public filing in May, Orion said it had agreements to sell the six Deerfield buildings and two other unidentified buildings for a combined $41 million. The buyers were not named.
For the Record
The seller is represented by CBRE brokers Tony Gange, Tom Svoboda, Matt Ishikawa and Brian Buckingham.