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 October 7.
Canadian Investment Firm Acquires a Slice of the Riverside
In June 2013, BOMA/Chicago held a Mid-Year Market Review Luncheon where industry experts outlined some of the biggest trends happening in Chicago’s real estate market. This week, we once again saw one of those trends take effect – that Chicago has become a very desirable international acquisition target and that global investors are interested in purchasing downtown buildings.
Ivanhoe Cambridge Inc., a Montreal-based company, has agreed to pay about $260 per square foot for 10 and 120 S. Riverside Plaza. These two towers, which line the west bank of the Chicago River, total about 1.4 million square feet and are almost fully leased. Ivanhoe Cambridge has also pledged to finance River Point, a 45-story office development at 444 W. Lake Street, which is just four blocks north of the Riverside Plaza buildings.
BOMA/Chicago Past President, Robert Six, was quoted by Crain’s Chicago about this transaction. According to Six, who is currently chief operating officer at Zeller Realty Group and who is not involved in the deal, said that “relative to a city like New York or Washington DC, I think Chicago provides investors with value without the roller coaster ride.”
Does LEED equal value in commercial real estate? The answer is “yes” according to Roger Platt, JD, senior vice president of global policy and law with the U.S. Green Building Council. Earlier this month, Platt told NuWire Investor that green buildings demand higher rents and asset prices, yield higher returns and hold value better than conventional spaces in a less-than-ideal market. Since LEED certification brands a building as being high-performance, that LEED certification will draw the attention of savvy investors.
In-Person Permit? It Will Cost You!
As Mayor Rahm Emanuel prepares to present his full 2014 budget on October 23rd, indications are that there likely will not be a wholesale property tax increase, but other taxes and fees will be increased. One proposal being discussed will cause commercial real estate operators to pay more for in-person building and zoning permits. The City has instituted an e-filing system and the proposed fee increase is designed to incentivize businesses to go electronic. Emanuel did not confirm specific amounts on how much extra the city would charge to in-person applicants. The permit fees are part of a broader move by the administration to make applying for a host of city licenses into online-only services by 2016.
BOMA/Chicago routinely meets with the Department of Buildings to identify, discuss, troubleshoot and improve the performance of the E-Permitting system.
Saying Goodbye to Google
Alter Group Ltd. has hired Chicago-based MB Real Estate Services LLC to manage leasing at a 17-story, 385,000-square-foot office building located at 20 W. Kinzie Street in River North. Google will be vacating 152,000 square feet of space within this building come 2015. 20 W. Kinzie Street did not previously have a leasing broker because of its 99% occupancy rate. Alter Group hopes to fill the space that Google will leave behind with one or two larger tenants and potentially give the tenants an option for naming rights.
Renderings of Motorola at the Mart
Motorola Mobility, a corporation owned by Google, has released renderings of the new office space it plans to construct at the Merchandise Mart. Motorola signed a 15-year lease to move to 604,000 square feet at the Mart, which will include a recreation area, a rooftop deck and other unique amenities. About 2,000 workers will transfer to the Mart from the current Libertyville location in early 2014.
What CRE or Chicago news headlines from the past week captured your interest? Leave us a comment and let us know.