A single-tenant Class C building in Chicago leased by AT&T sold for $16.3 million, a deal that shows fully occupied office buildings are still an appealing investment in the pandemic-battered market.
Echo Real Estate Capital, formerly known as Echo Development Group, sold a 94,000-square-foot building at 2401 West Grace in Chicago to an undisclosed international investor. Echo said AT&T, where they operate a call center with 500 employees, signed a lease extension earlier this year.
“I think they [AT&T] were wrestling with the same ‘future of remote work’ question that a lot of companies are faced with today,” said Jon Boyajian, Echo’s principal. “Ultimately they felt it was important to keep the space and maintain a presence in this market.”
AT&T’s lease renewal for the entire building is unusual as firms are shrinking floor plans after the pandemic enabled employees to work remotely. Most notably, Sterling Bay is downsizing its building at 360 North Green Street in Fulton Market by 40 percent to 25,000 square feet, in hopes to attract tenants who want to avoid large office footprints.
About 75 percent of all new, renewed and expanded leases in the central business district were signed by firms looking for less than 10,000 square feet, according to Cushman & Wakefield.
Echo bought the property, occupied by AT&T, from Inland Private Capital in 2018 for $14 million. If the company chose to vacate the building after its lease expired, the company was considering redevelopment options, such as getting new office tenants or building a multifamily property. The company, however, stayed as the building’s tenant.
Echo’s website shows it owns six properties including multi-tenant office and industrial buildings across five states totalling $146 million.
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