A Miami-based investment firm is cranking up its effort to stop the parade of businesses moving out of north suburban Deerfield.
An entity controlled by Bridge Loan Investors secured a $12.7 million loan on the roughly 270,000-square-foot North Parkway One complex it acquired in late 2017. Deutsche Bank provided the five-year, fixed-interest-rate loan, according to Miami-based Aztec Group, which brokered the loan.
The building is about 92 percent occupied, including 200,000 square feet leased by wholesale office supplier Essendant. Other tenants include software company Friedman Corporation and staffing agency Ajilon.
One Parkway North was part of $3.3 billion real estate portfolio that New York-based Blackstone Group picked up from GE Capital Real Estate in 2015, Crain’s reported at the time. After sinking about $4 million into renovating the building, including a new fitness center and tenant upgrades, Blackstone sold the property to Bridge Loan Investors in 2017 for $47 million.
Bridge then sold the land underneath the building for $30 million to an affiliate of Miami-based Kawa Capital, while retaining ownership of the five-story complex.
Bridge now is pushing through its own series of renovations to the building, managing director Joseph Horn said.
Horn and Bridge’s other partners also control an investment group called Horn Eichenwald Investments, which was widely reported as the buyer of One Parkway North at the time of the sale.
Aztec Group’s Charles Penan, Howard Taft and Brell Tarich brokered the recent loan.
The financing overcame a hurdle that emerged last year when Essendant was acquired by office supply behemoth Staples in a $996 million deal, Penan said.
“It made it a little challenging, because everyone is a little uncertain about retail in general right now,” Penan said. But he added Essendant focuses on corporate office deliveries, which are seen as less vulnerable to the nationwide retail shake-up.
The One Parkway North building has fared better than some of its neighbors, like Ten Parkway North, which is due to be vacated by its sole tenant, Markel, next year. Chicago-based Core Acquisitions bought the 100,000-square-foot building in a $6.8 million deal earlier this year.
And Deerfield’s wider office market is reeling from a plan announced last year by Takeda Pharmaceuticals to pack up its three-building office complex, about a mile south of Parkway North, and resettle in Boston. Months after that news broke, Mondelez International set out to relocate to Fulton Market, leaving behind its 53,000-square-foot office in Three Parkway North.
But Walgreens Boots Alliance pledged to hold onto its Deerfield corporate campus, even after it takes 200,000 square feet in 601W Companies’ renovated Old Post Office complex.
And even with the recent wave of relocations, Parkway North can lean on its coveted location overlooking the Tri-State Tollway just north of where it merges with the Edens Expressway, Penan said. Plus, its proximity to the corporate headquarters of Discover Financial Services and Baxter healthcare may make it appealing to large office users looking to hire locally, he added.
“There’s still a lot of desirability among office tenants there, because there’s a good workforce in the area,” Penan said.
Bridge will use the loan to back more acquisitions, potentially picking up more Chicago-area properties, Horn told The Real Deal.
“We like the city,” Horn said. “We see that it’s growing and improving a lot, and you have a lot of new investment coming up.”