A venture led by Australian investor Andrew Saunders is seeking to offload its nearly fully leased office building near O’Hare International Airport.
Saunders, an executive with Quattro Asset Management, has tapped commercial real estate firm CBRE to find a buyer for the 139,000-square-foot property at 1700 West Higgins Road in Des Plaines, Crain’s reported.
The asking price is $14 million, or about $100 per square foot. CBRE’s Blake Johnson, Kevin Kobe and Michael Whisler are marketing the property. It is 91 percent leased and expected to yield a first-year return of over 11 percent.
A sale at the listing price point would cover a $12.5 million mortgage secured by Saunders’ venture from Revere Capital in 2022, Cook County records indicate. Such a deal would be a rare example of a Chicago-area office building selling for more than its outstanding debt.
The listing comes as the office market struggles with reduced demand due to remote work trends, resulting in record-low vacancy and hesitant investors. However, properties around O’Hare have shown resilience.
The 38-year-old property, boasting a weighted average lease term of 6.25 years, is expected to generate $1.6 million in net operating income next year.
The building’s largest tenant, football helmet-maker Riddell, has a long-term lease for 31,000 square feet. Riddell moved its headquarters to the property in 2017. It expanded its space last year and extended its lease until January 2034.
The number of office buildings sold in the Chicago area during the first half of this year increased 39 percent compared to the same period last year, according to MSCI Real Assets. Much of that was driven by investors seeking discounts on distressed properties.
John Solberg’s Onward Investors, for instance, is under contract to acquire a steeply discounted office property near O’Hare in Rosemont.
The trend of discounted offerings in the area includes TPG and Angelo Gordon and Glenstar’s listing of a suburban office complex near O’Hare.
— Andrew Terrell
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