The new year got off to a rousing start in the office market, both for the city and suburbs, with four 100,000-square-foot-plus deals announced soon after Jan. 1.
The major lease transactions reported by four different brokerage firms were especially encouraging in light of the fourth quarter office vacancy statistics which were released in the last two weeks.
Those numbers showed the downtown office market stagnant with close to a 20 percent vacancy and the suburbs improving, but still nowhere near respectability, with a vacancy rate above 17 percent.
The largest of the four deals was the sale of the former Gould Research & Development Center, a 142,000-square-foot facility at 2800 Golf Rd. in northwest suburban Rolling Meadows.
RTC Industries Inc., a designer and maker of point-of-purchase displays and specialty packaging, bought the two-story building and will relocate its corporate headquarters to the site from Chicago in April. The price wasn’t disclosed.
Mark Smith, first vice president with CB Commercial Real Estate Group, who represented Gould in the sale, said the purchase completes the sale of buildings at the Gould site, which was developed in the mid-1970s for the electronics firm.
The four buildings of the 56-acre Gould Center, now an office park renamed Meadows Corporate Center, came on the market following the acquisition of Gould in 1989 by Nippon Mining Co., which consolidated its operations elsewhere.
Smith said two vacant parcels in the park, of three acres and five acres, remain for sale. They are zoned for office or related uses.
North suburban Evanston received a welcome bit of news last week when Packaging Corp. of America said it would renew its lease for 120,000 square feet of office space in the NBD Bank Plaza, 1603 Orrington Ave., in the suburb’s downtown.
A subsidiary of Tenneco Inc., PCA-one of the country’s largest manufacturers of corrugated containers, containerboard, folding cartons and other products-had considered relocating to downtown Chicago or farther north along the North Shore, according to Goldie B. Wolfe, whose firm represented the tenant in its site search.
The new lease will allow PCA to consolidate its headquarters operations in Evanston, moving 50 employees from 2100 Sanders Rd. in Northbrook. The 32,000 feet the company occupied there will be subleased. The company will maintain its technical center in Skokie, Wolfe said.
Assisting PCA was Andrew Davidson and Gene Ventura, also with Golde B. Wolfe & Co. Building owner Washington National was represented in lease negotiations by Anita Pallardy of the John Buck Co.
In downtown Chicago, The Globe Group, which owns Globe Glass, has leased 106,000 square feet at 2 N. LaSalle St. The company currently subleases a full floor there from Beatrice Co., and will expand to four floors by mid-1994. The company will move its headquarters from a three-building complex on Fullerton Avenue near the Kennedy Expressway.
David Kahnweiler, Richard Berger and Bradley Belcaster of Colliers, Bennett & Kahnweiler Inc. represented The Globe Group in the transaction. Jim Cory and Mike Sivewright of Compass Management & Leasing represented ownership.
And on the city’s Far Northwest Side, the Gas Research Institute, a research and development organization which serves the natural gas industry, said it will renew its lease for 100,000 square feet at Presidents Plaza I, 8600 W. Bryn Mawr Ave.
Steve Stratton, Robert Palffy and Ted Parris of Tanguay-Burke-Stratton Comprehensive Real Estate Services represented the institute in its one-year market review. The company considered both downtown and suburban sites before settling on staying put, Stratton said.
Presidents Plaza, owned by Metropolitan Life Insurance Co., was represented by Susan Prock of Met Life and Elaine Hoffman of Koll/Rubloff.
Soaring on MJ’s drive
The recently announced Michael Jordan Golf Co. has named Chicago firm Perry Ruda & Co. as its exclusive real estate representative to locate sites for lease or purchase in order to develop the golf centers.
“The first Michael Jordan Golf Center will be in the Chicagoland area,” Ruda said. “The ideal land sites will be 20 to 30 acres in high density locations with excellent access and visibility.”
Ruda said the initial focus of the site search is in the northern suburbs and Chicago. Jordan has said he wants the golf centers to help bring the game to people who have not had access to it before.
“We are zeroing in on a few sites and expect to make some final decisions shortly,” Ruda said.
Jupiter in orbit
Jupiter Mechanical Industries, a newly formed division of The Jupiter Corp., has consolidated six operating units into a 70,000-square-foot office and fabrication facility at 77 Wheeling Rd. in north suburban Wheeling. The site previously housed Economy Mechanical Industries, one of JMI’s operating units.
To accommodate the consolidation, the fabrication plant was expanded to 55,000 square feet. About 125 people will be employed at the site, Jupiter president Don van Eeghen said.
JMI, formed a year ago, is a mechanical construction firm that provides heating, ventilation, air conditioning, sprinkling and other services. In addition to EMI, its operating units include Robert Irsay Co., Illinois Mechanical Engineering, A.H. Lumm, Jupiter Service Division and Linear Flow.
Odman in at Meadow Lakes
The Odman Corp., a paper and plastics manufacturer, has purchased 10.6 acres in the Meadow Lakes Corporate Park, U.S. Highway 34 and Frontenac Road in west suburban Aurora, and plans to build a 150,000-square-foot plant there.
Patricia Baldwin, vice president of Paine/Wetzel Associates Inc., who represented Odman in the transaction, said the company will expand from a 73,000-foot factory in Aurora. Baldwin said Odman wanted to stay in Aurora and its new site will allow it additional expansion capabilities.
Elise Couston, senior vice president of Paine/Wetzel, represented park developer Aurora Venture in the deal.
Other leases and sales
– Three domestic corporate pension funds have completed their purchase of 225 West Washington, a 28-story, 490,000-square-foot office tower in downtown Chicago. CB Commercial Realty Advisors, which represented the unidentified funds, said the sales price was approximately $65 million. Citicorp Real Estate Inc., along with 11 offshore financial institutions, sold the property they had acquired in 1992 following developer Steven Fifield’s default on the original mortgage. The deal is the second in a series of transactions on behalf of CB Commercial Co.-Investment Program, a plan that brings pension funds together for joint investments.
– Tucker Properties Corp., a publicly traded real estate investment trust, has purchased the 240,000-square-foot High Point Centre in Lombard. Tucker said it paid $14.4 million for the community shopping center at Roosevelt Road and Fairfield Avenue that is 85 percent leased. Cushman & Wakefield handled the transaction. Aetna Life Insurance Co. was the seller.
– The architectural firm of O’Donnell Wicklund Pigozzi & Peterson has renewed its lease for 32,400 square feet of office space in one of the projects it designed, the Deerbrook Corporate Center in Deerfield. Frain Camins & Swartchild, which represented the building, said the firm has been a tenant in the project since its completion in 1984.
– The Industrial Bank of Japan Ltd. will sublease 27,000 square feet of office space at the AT&T Corporate Center, 227 W. Monroe St., and expand its operations from Three First National Plaza, according to Julien J. Studley Inc., which represented the bank.
– TIG, formerly Trans America Insurance Co., has renewed its lease for 25,000 square feet at Woodfield Financial Center, 1375 W. Woodfield Rd. in Schaumburg. CB Commercial Real Estate Group, which represented owners The Mutual of New York Life Insurance, said TIG would continue to house its Midwest regional offices in the space.
– House of Teak, the furniture retailer, has leased 22,500 square feet at University Plaza in Downers Grove and will introduce its new Design House concept store at the location, Highland Avenue and Butterfield Road. Grubb & Ellis, which represented the tenant, said House of Teak is also expanding its store at Woodfield Commons East, on Golf Road near Meacham Road in Schaumburg.
– Bartlit Beck Herman Palenchar & Scott, a newly formed law firm consisting of former Kirkland & Ellis senior members, has leased 18,000 square feet of office space at Courthouse Place, 54 W. Hubbard St. in Chicago. Owner J.A. Friedman & Associates said five other leases recently signed in the 100,000-square-foot property bring the historic building to 100 percent occupancy.
– Equity Partners Ltd. has acquired a single-story medical office building at 830 West End Court in Vernon Hills on behalf of Great Lakes REIT Inc., an Oak Brook-based real estate investment trust. The asking price for the property, whose major tenant is the multispecialty group practice North Suburban Clinic, was approximately $2 million.
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Steve Kerch’s columns appear in Real Estate on Sunday and in Your Money on Thursday.
