A Minnesota-based investor is nearing a deal to acquire a deeply discounted office complex near O’Hare International Airport.
A venture tied to Wayzata Investment Partners, led by managing partner Patrick Halloran, is set to purchase Presidents Plaza for a price well below the $147.5 million loan owed to Bank of America, CoStar reported, citing people familiar with the deal. The property, at 8600 and 8700 West Bryn Mawr Avenue, spans 831,400 square feet.
With the loan set to mature in less than two years, Wayzata’s pending acquisition is expected to result in a significant financial loss for the owners, New York-based TPG Angelo Gordon and Chicago’s Glenstar. Cushman & Wakefield’s Dan Deuter, Tom Sitz and Cody Hundertmark are representing the sellers in the lender-facilitated sale.
The discount highlights the continued challenges facing Chicago’s suburban office market. One O’Hare Centre, at 6250 North River Road in Rosemont, is being sold for $70 million, down from $83 million in 2015.
High vacancies and weak leasing activity continue to drive down prices in the suburbs.
Presidents Plaza was purchased by TPG Angelo Gordon in 2018 for $147 million ($177 per square foot), borrowing $112.3 million for the purchase. Glenstar has had a stake in the building since 2006, and the owners later increased their debt on it to $147 million.
However, the two-building office complex has been unable to maintain high occupancy levels, with only 63 percent leased as of this summer.
Its location near O’Hare offers advantages in terms of accessibility, but its distance from the Loop places it within the suburban office market, which has been particularly hard hit by vacancies and declining property values.
Office vacancy in the Chicago suburbs reached 31.2 percent in the second quarter. Medline Industries recently inked one of the largest suburban office leases in Chicagoland since 2020, taking 210,000 square feet at 2375 Waterview Drive in Northbrook.
— Andrew Terrell
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