W.P. Carey shopping empty Goose Island office
Landlord struggles to lure tenant after Laureate buyout
After striking out with a search for a new tenant to fill a vacant Goose Island office building, landlord W.P. Carey is ready to move on.
The owner of the 179,000-square-foot structure at 900 North North Branch Street at the southern tip of the island hired Chicago-based Cushman & Wakefield to sell the property, Crain’s reported.
Its listing price has not been disclosed.
The offering gives investors a chance to buy a commercial property in perhaps the most rapidly evolving real estate submarket of Chicago.
Steps away from the empty office building, the Vancouver-based developer Onni Group is planning a 2,700 apartment project through a redevelopment of the former Greyhound bus repair facility on Goose Island. And right across the Chicago River, Bally’s is set to build a $1.6 billion gambling and entertainment campus after winning the bid against four other competing proposals to be the city’s first casino.
Developers such as R2 Companies in the past few years have lured office tenants to Goose Island through pricey repositionings of worn industrial buildings as creative office spaces, such as Crate and Barrel affiliate CB2.
The area’s appeal is still limited to certain office tenants who have a desire to be outside the city’s main commercial hubs like the Loop and Fulton Market, for reasons that include the island’s quieter atmosphere and its abundance of vehicle parking. Goose Island remains especially desirable for industrial real estate purposes.
W.P. Carey tried to refill the building after losing a long time tenant, the local culinary school Kendall College, whose logo still adorns the roof of the highly visible eight-story building. Kendall’s former parent company Laureate signed a 20-year lease in 2008 — the same year W.P. Carey bought the building for $29 million in a sale-leaseback deal with Laureate.
However, Laureate terminated the lease in 2018, when Kendall’s degree programs were taken over by National Louis University and relocated to Michigan Avenue.
The landlord tapped brokers Tom Sitz and Cody Hundertmark of Madison Rose to bring in a new tenant after Laureate halted its search to sublease the space and opted to buy its way out of the contract.
W.P. Carey pitched biofuel firm LanzaTech, but talks between that company and the landlord fell apart as the potential tenant decided to remain in its Skokie offices for the time being, people familiar with the negotiations told The Real Deal.
— Sam Lounsberry