Office News

JBS Commercial Real Estate Closes $10 Million Sale in Westmont

Local real estate investment group, 1133 Cleveland, LLC acquired the office/flex building commonly known as Oakmont Tech Center located at 600-680 Oakmont Lane, Westmont, IL. The property sold for approximately $10,000,000.

Oakmont Tech Center is a single-story, 111,659-square-foot building completed in 1989. The building was 100 percent occupied at closing and benefits from its close proximity to Oak Brook and I-88. Jason Shibata & Brian Silverman, Partners of JBS Commercial Real Estate represented the buyer.

The Future of Work: Report on Changing Office Spaces Signals Shifts in the U.S. Economy

An exhaustive analysis of flexible workspaces and coworking underlines big shifts in how we work today

From Curbed Chicago | By: PATRICK SISSON

WeWork

Coworking and flexible workspaces are more than just the latest trend, or a new driver of the office space market. According to an exhaustive report released this week by The Instant Group, the strong growth in this sector, increasing nationally at a rate of 10 percent last year to encompass nearly 4,000 locations across the United States, reflects larger shifts in how we work. With more then 40 percent of the American workforce employed on a contingency basis, according to the report, and an increasing number of larger corporations, such as Verizon and Microsoft, buying into the concept of community- and collaboration-oriented workspaces, expect the market for these spaces to continue to expand rapidly.

Not surprisingly, the flexible office and coworking market still clusters around a handful of big metropolitan areas, with half the market in just 50 cities, mostly driven by the growth of TAMI (technology, advertising, media, and information technology) firms. Both San Francisco, which saw a 11.5% increase in desk space last year, and Washington, D.C., which saw a 17.2% jump, are prime examples.

What may be surprising is just how much of the growth in this industry comes from corporate clients, as opposed to the freelances, tech entrepreneurs, and small businesses often portrayed as the natural occupiers for these environments. Instant's report notes that 79% of the companies making deals for spaces of 40 desks or more have been large corporations, and the number of deals of this size have tripled over the last two years, driven by demand from the corporate sector. WeWork, for instance, is hugely popular with Microsoft, according to the report.

This increased demand has been a boon to landlords, who have now been given a new means to market, rent, and profit off their investments. New York City provides a great case study. Pent-up post-recession demand had led to a boom in office space construction—26 million square feet of new space is scheduled for completion—and with older stock unsuitable for the needs of modern tenants, many are turning to flexible or coworking-type layouts, featuring higher density, open spaces with collaborative break-out areas.

Models differ considerably within the industry, with big players, defined as companies with more than 50 locations such as Regus and WeWork, making up on 30% of a fragmented market. The majority of new spaces have been opened by small businesses or landlords looking to activate dormant office space, creating a competitive market with extensive consumer choice.

"The coworking model is highly nuanced and differs considerably across the US," said Michelle Bodick, Managing Director of Instant US. "The focus of the facilities we surveyed varies enormously; some are aimed at building local communities of artisans or minorities together [those aimed at particular trades or demographics], but also drop-in membership provision for people who want somewhere to work for an hour."

While WeWork continues to grab the headlines, it’s relatively small (66 locations, 2 million square foot of office space), compared to established owner Regus, which operates 3,000 centers globally in 900 cities and is pivoting towards providing more and more flexible space. The company opened its 1,000th U.S. location last year, has begun to install community managers in its office centers, and recently acquired Spaces, a Dutch coworking company, with plans to establish the brand in the United States (it’s already opened a handful of locations in California).

As Regus’s growth suggests, the U.S. is certainly not alone in embracing a new type of workspace. The global market for flexible workspace now totals $21 billion, due to a compound growth rate of 21% over the past five years.

Looking ahead, Instant forecasts increased U.S. growth in this agile sector, especially in secondary markets that are both near a primary city, such as Delray Beach or Encino, and have an industrial or manufacturing history (which means plenty of large factories and industrials spaces ripe for conversion).  More corporate clients are turning to this kind of space for innovation labs and in-house incubators, and the desire for a different experience with more networking opportunities means more demand for operators large and small. Looks like the old-fashioned dream of a corner office may need to be reconsidered.

Original Article: Curbed Chicago | By: PATRICK SISSON

601W Cos. Buys Old Post Office

GlobeSt.com | ARTICLE BY Brian Rogal
March 18, 2016

CHICAGO—The significance of this sale is unclear. City officials seem determined to use the eminent domain process to assume control and have already issued an RFP.

CHICAGO—Another developer may get a shot at tackling one of the biggest question marks in the city’s downtown. Bill Davies’ International Property Developers North America announced yesterday a conditional sale of the Old Post Office, the iconic 2.7 million square foot property that straddles the Eisenhower Expressway, to New York-based investment group 601W Cos. It is still not clear whether the deal will survive, as city officials seem to have other ideas.

Earlier this week, after losing patience with Davies’ unsuccessful attempts to cobble together a workable plan since acquiring the site in 2009, the city’s Department of Planning and Development issued a RFP for the property with proposals due June 10. Officials want to take over the site through the eminent domain process, identify a company willing to buy it for fair market value and then transform it into an office or mixed-use project. Davies’ sale was announced the day after the RFP was issued.

“I think the obvious thing is that the city will, I’m sure, respect the contract,” Richard Sykes, a consultant with Savills UK who represented IPDNA, told GlobeSt.com. He pointed out that 601W Cos. has built up a formidable reputation as a firm that can take over and revive aging properties. It bought the Starrett-Lehigh building in New York, for example, a 2.3 million square foot Art Deco landmark, “and turned it around in a short space of time.”  

The company also owns Chicago’s One Prudential Plaza and has transformed the 60-year-old tower into a sleek modern office space with a host of new amenities. And in 2014, it purchased the 2.15 million square foot Southfield Town Center, perhaps the most recognizable office complex in suburban Detroit, for $177.5 million, even though it was only 67% occupied at the time. In all, 601W Cos. has acquired and repositioned more than 40 million square feet of trophy office assets within the US. It also owns other Chicago properties including the giant Aon Center and 111 W. Jackson.

IPDNA went through a long process before settling on 601W Cos. In late 2014, IPDNA brought in Savills to seek a joint venture partner or purchaser. In the subsequent 18 months Savills gave presentations in China, Japan, South Korea, Malaysia, the Middle East and Europe as well as throughout the US and Canada.

Serious negotiations with 601W Cos. began in May 2015 and the parties signed a contract of sale this week. The companies did not disclose the sale price or whether Davies’ firm will still play a role in the redevelopment.

City officials “only knew about it on Tuesday,” Sykes said. “It would have been nice to do it a week before,” but it took a few more days to finalize the deal. The looming threat of the RFP “had no impact whatsoever” on the negotiations. 

Asked whether he expects the city to now withdraw the RFP, Sykes said, “it’s not for me to comment on. But 601W has every intention of moving forward.”

The city’s response perhaps sets the stage for a battle in court. “The city is going forward with the RFP as planned,” Peter Strazzabosco, deputy commissioner of the planning department, told GlobeSt.com. The city will hold a pre-submittal conference on April 14, and “potential developers are strongly encouraged to respond.”

Along with Sykes, Lisa Davidson and Tiffany Winne of Savills Studley represented IPDNA; 601W Cos. was represented by Jaime Fink and Jeff Bramson of HFF.

 

To Compete, Lake County Needs To Be More Affordable

GlobeSt.com | Article by Brian Rogal

March 4, 2016

CHICAGO—Brad Migdal, a site selection expert with Transwestern, tells GlobeSt.com that the recent moves by Allstate and Beam Suntory should motivate Lake County to make it cheaper for millennial workers to live there.

The Merchandise Mart has now become one of the most significant tech hubs in the US.

CHICAGO—The plans announced this week by AllstateCorp. and Deerfield, IL-based Beam Suntory to make moves from the suburbs into the Merchandise Mart are not really surprises, given the parade of companies that have made similar migrations in the past several years. And Brad Migdal, executive managing director of the site selection/business incentives practice at Transwestern, tells GlobeSt.com that Lake County could lose even more workers in the near future if it doesn’t do something to make living there more affordable. 

“Lake County’s biggest problem is its property taxes; it’s like paying two mortgages,” he says, and if the younger tech workers that most companies want to recruit can’t afford Lake County, those companies will continue to move to where the workers do want to live. And these days that means the city. 

“These moves are great for Chicago, but bad for Illinois,” he adds, because the state is no longer attracting companies from out of state, as it did when Boeing moved from Seattle, but instead just shuffling existing ones around. “We have these beautiful corporate campuses in the suburbs, and they are going to turn into dinosaurs.” 

“We have had some great successes in the suburbs with the pharmaceutical sector,” but “every year a new bunch of millennials move to Chicago. They move to where they want to live, rather than to where the jobs are.” And the most important consideration for most companies these days when selecting a new site is how it will help with talent recruitment. “Every project I do now, whether it is office or industrial, the companies are chasing labor.”  

And although Allstate says only about 400 of its workers, primarily those involved in quantitative research and analytics, will make the move from its Northbrook headquarters to 45,000 square feet on the Mart’s eighth floor, Migdal wonders if that is just the beginning. After all, if the move helps Allstate recruit tech workers, company officials may decide to move advertising, marketing and other departments downtown. “What then happens to that property?”

“The suburban real estate market is at a crossroads,” he says. “We just need to make it more affordable for millennials. Chicago is winning that battle.”

Link to Original Article

GlobeSt.com [official website]

9 of Chicago's hottest tech offices: Company Culture and New Office Trends

Source: Built in Chicago - Andreas Rekdal

Source: Built in Chicago - Andreas Rekdal

Source: Built in Chicago
From basketball courts to Nintendo rooms, here are 9 of Chicago's hottest tech offices
Author: Andreas Rekdal

With a shift in the office environment, we're seeing a lot of companies shifting from the traditional private offices to more open collaborative environments.  Cultural changes in the work place have been the predominant force behind these changes.  

Although this open environment is not for every company, the link below shows some really cool offices and how it can be done.

JBS Commercial Real Estate to Lease Corporetum III

Lisle, Illinois (January 22, 2016) Local Real Estate Investment Group, American Landmark Properties Acquires Lisle office building commonly known as, Corporetum III, located at 750 Warrenville Road, Lisle, Illinois; a unique 91,722-square-foot, 4-story Class A building that caters to small and mid-size companies in desirable DuPage County. The office building features state of the art gym facilities, upscale conferencing center and many new improvements to modernize the asset.  Office Space availabilities at the property range between 1,500 to 23,087 Square Feet. Corporetum III offers floor to ceiling windows, park views, unique private terraces and a full floor availability of approximately 23,087 SF.  

American Landmark Properties is a local investment group owning nearly 8,000,000 square feet throughout the Midwest and northeast.  American Landmark Properties will begin renovations including multiple spec suites, lobby and other common areas.  Furthermore, ownership has earmarked funds for tenant improvements and leasing commissions.  Ownership is well positioned to accommodate a quick occupancy and motivated to make deals.

JBS Commercial Real Estate was awarded the exclusive leasing assignment for Corporetum III, a 4-story Class A office building recently purchased by Skokie based, American Landmark Properties.

Brian Silverman and Jason Shibata from JBS Commercial Real Estate will serve as the listing agents for the Lisle office property.  For leasing information, please call 312.462.1020.