Canadian investors are looking to sell a well-leased office building near Chicago’s O’Hare International Airport in a deal that could be a barometer of pricing after years of transactions mostly involving properties in deep financial distress.
Owners of the 12-story One O’Hare Centre building in Rosemont, Illinois, have hired Cushman & Wakefield to sell it, according to a brochure from the brokerage.
Calgary-based MDC Realty Advisors and an affiliate of Vancouver-based Nicola Wealth Management have owned the building at 6250 N. River Road since late 2015, when they bought it for $83 million.
The building at 6250 N. River Road stands out because it is nearly 93% occupied, with a weighted average lease term of seven years, according to the brochure. It is hitting the market more than four years into the pandemic, an era in which most Chicago-area office buildings available to buyers have been ones with high vacancy and plunging values.
Offers for One O’Hare could be in the range of $70 million, according to someone familiar with the property. That would be a loss from the previous sale price, albeit a relatively small one compared with other recent office deals in Chicago and the suburbs at massive discounts to pre-pandemic levels.
Such a price also would be far above the value of the $49.8 million loan that the Canadian firms borrowed from Allianz Life Insurance in 2015. That loan was amended late last year to mature this October, with a remaining balance of just over $41.5 million at the time, according to Cook County property records.
MDC and Nicola did not immediately respond to requests for comment from CoStar News on Thursday.
New Uses
Because of historically low office demand, some suburban corporate campuses have been sold to be demolished and replaced with new uses, such as logistics and data centers.
In one recent sale of a modern office property where no change in use is expected, the two-tower Schaumburg Towers complex near the sprawling Woodfield Mall was sold for $74 million. The previous owner paid $86.6 million in 2018 and spent more than $20 million on renovations.
Several office complexes near Chicago have been surrendered to their lenders, including the four-building Oak Brook 22 property near the Oakbrook Center mall. Last year, the owner of the leasehold interest in the two-building Triangle Plaza complex near O’Hare handed that property back to its lender despite 92% occupancy.
Strengths of the 380,360-square-foot One O’Hare include proximity to the airport and interstates 90 and 294 as well as longtime tenants with years of lease term remaining. The property also has more than 1,000 covered parking spaces in a garage.
The largest tenant is food and beverage distribution giant Reyes Holdings, which has expanded several times in its 13-plus years in the building, according to Cushman & Wakefield. Commercial real estate services firm Colliers International leases 34,012 square feet.
Current ownership has invested more than $5.5 million in improvements, according to the marketing materials, including new fitness equipment and a Starbucks cafe.
For the Record
The sellers are represented by Cushman & Wakefield brokers Dan Deuter, Tom Sitz and Cody Hundertmark.