Beco lists Libertyville’s former Motorola campus for sale

Beco Management is looking to offload a north suburban Chicago office complex that it poured big money into redeveloping.

The Maryland-based firm has hired Eastdil Secured brokers Bryan Rosenberg and David Caprile to market the 1 million-square-foot former Motorola Mobility campus at 1910 Innovation Way in Libertyville, Crain’s reported.

Beco acquired the 83-acre property in 2014 and spent almost $50 million to turn the former cell phone plant into a multi-tenant office and research hub. The campus, now known as Innovation Park Lake County, comprises four attached buildings and is 71 percent leased, which is on par with the average office occupancy rate in Chicago’s suburbs, where the office market is struggling.

Despite challenges facing office owners like rising interest rates, remote-work trends and a tight lending environment, Beco aims to showcase the appeal of corporate campuses in suburban areas with modern amenities and stable cash flow from long-term leases.

The property, with a weighted average lease term of just over nine years, meaning there’s stable revenue in place for the near-term, has attracted tenants such as Valent BioSciences, Medline Industries and Bristol Meyers Squibb, accounting for 42 percent of the property’s rentable space. All of the tenants combined are on the hook for nearly $70 million in base rent, the outlet reported.

While an official asking price has not been revealed, Beco has expressed a willingness to provide “stapled financing,” acting as the lender for potential buyers to facilitate an acquisition. This financial strategy has become increasingly common, particularly among banks with mortgages tied to severely depreciated office buildings.

The remote-work movement is still hindering demand for office space, but Eastdil is playing up the various in-person uses at the Libertyville campus, including research and development, manufacturing, testing facilities and lab space.

Beco’s vision for the complex, coupled with its significant investments in renovations, has resulted in a property with notable cash flow and potential for future development. 

While it’s been a sluggish year for suburban office sales, one recent transaction raised some eyebrows. Earlier this month, Blackstone sold an Oakbrook office tower for $60 million in an all-cash deal, marking the largest sale of a multi-tenant suburban office building in 18 months. Still, it was at a big discount, as Blackstone was hoping to get more than $100 million when it started shopping the property last year.

— Quinn Donoghue 

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