Stahelin Properties is seeking a bargain buyer for the Crossroads Executive Centre in Rolling Meadows near Woodfield Mall.
The Chicago-based firm, headed by brothers Michael and Monty Stahelin, listed the 140,000-square-foot property at 3601 Algonquin Road for $7 million, or just under $50 per square foot, Crain’s reported.
The 10-story office building is being marketed by Adam Johnson and Tom Gnadt of NAI Hiffman.
Stahelin faces an uphill battle in attracting potential buyers as the office market continues to evolve due to changing work patterns. The firm, which owns other properties in the area, hopes to sell the building to pay off its $6.6 million loan from Heartland Bank & Trust, which was refinanced in 2022.
Built in 1972 and last renovated in 1998, it is 63 percent leased, significantly below average for suburban Chicago offices. With an increasing number of companies embracing remote work and downsizing their office spaces, Class C properties like Crossroads have been hit especially hard.
Still, NAI Hiffman believes the property has potential, citing its projected cap rate of 9 percent.
“It’s a strong yield to start with some significant upside,” he said, referring to the opportunity to lease the remaining vacant space.
Many of the building’s tenants occupy just over 1,600 square feet, with a number having remained at the property for over a decade, what Gnadt calls “stickier tenants.”
However, the suburban office market remains bleak. Since 2020, companies have cut back on nearly 4 million square feet of office space in the region. Earlier this year, the availability of suburban office space reached a record 31.3 percent. This was marked by 14 consecutive quarters of increasing vacancy, according to JLL.
Some developers have looked at converting older office buildings into other uses. A nearby office building at 3800 Golf Road is set to be demolished to make way for industrial development, while outdated offices in Elk Grove Village are being transformed into data centers.
— Andrew Terrell
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