Each week, The Elevator Speech summarizes news related to some of the key industry trends, buildings, deals and dealmakers that shaped headlines. Below are articles that caught our attention the week of February 25.
- Investors in downtown Chicago office buildings embraced more risk in 2012 by purchasing more fixer-uppers or properties with high vacancy rates. According to Jones Lang LaSalle, 20 downtown Chicago office buildings changed hands last year for a combined $2.64 billion, compared to 15 sales for $2.74 billion in 2011. However, the average price per square foot dropped, reflecting a shift away from tier-one buildings in prime locations toward riskier, “value-add” investments — buildings that sell at a discount because they have lost tenants or require renovations.
- Now that vacancies are declining and rents are climbing in downtown Chicago, the Chicago Loop Alliance announced a new strategy plan aimed at clarifying the organization’s role in economic development, housing, transportation, tourism, culture and services in the Loop. The plan will tap input from business owners, elected officials, civic leaders and board members. “With the Loop moving in the right direction, it’s time to shift gears and ask residents and business owners what they think of its opportunities and challenges, as well as the role of the alliance,” said Michael Edwards, executive director of the Chicago Loop Alliance.
- The 10-story office building at 216 W. Jackson is for sale. The 176,622-square-foot Class C property is 93 percent leased, and was purchased for $22.7 million in 2007. Farbman Group currently owns the building, and hired HFF Inc. to sell 216 W. Jackson.
- BOMA Chicago Energy Center LLC signed a formal work agreement with Automated Logic Corporation, a global leader in building management energy solutions, to launch a pilot commercial smart gird program in Chicago. Under the program, up to 40 BOMA/Chicago member buildings will participate in a smart grid pilot program that will provide buildings with granular, real-time energy usage data to help property managers implement energy efficiency measures. Check out the Crain’s Chicago Business article for more information.
- The owner of the Merchandise Mart announced it will not sell the marquee Chicago office building. Many real estate experts believed Vornado Realty Trust would put the 4.2-million-square-foot property up for sale after Google signed the largest lease in downtown Chicago since 2005. Currently, the Merchandise Mart is comprised of 45 percent office space and 55 percent showrooms, with an overall capacity of 96 percent.
What CRE or Chicago news headlines from the past week captured your interest? Leave us a comment and let us know.