The new owners of Chicago’s Presidents Plaza office complex are planning substantial upgrades following a recent $60 million recapitalization deal.
Chicago-based developer Glenstar and Wayzata Investment Partners have committed $16 million to speculative suites, common-area improvements and amenities across the two-building complex at 8600 and 8700 West Bryn Mawr Avenue, CoStar reported. Planned upgrades include open-ceiling suites, high-tech conference rooms and a golf simulator.
The 831,000-square-foot complex rises 12 stories and is about 40 percent vacant. Glenstar has been part of the property’s ownership since 2006. Amenities and modern buildouts are critical for companies to attract top-level talent, said Michael Klein, Glenstar’s co-founder and managing principal.
“With no debt on the property, there are no lender constraints, and we will be creative with lease negotiations to solve tenant needs,” Klein said.
The property’s sale for $62 million, or $75 per square foot, last month marks a sharp drop from the $177 per square foot Minnesota investor TPG Angelo Gordon paid for it in 2018.
The discounted sale, facilitated by Cushman & Wakefield brokers Dan Deuter, Tom Sitz and Cody Hundertmark, highlights the shifting real estate values affecting Chicago’s commercial property market
One O’Hare Centre, at 6250 North River Road in Rosemont, is being sold for $70 million, down from $83 million in 2015. The nearby Riverway complex at 9377 and 9399 West Higgins Road and 6133 North River Road in Rosemon also faced foreclosure before it was listed for sale.
Debt-free office buildings can give landlords an advantage in a market with a lot of distress, like Chicago. Landlords can be more generous with lease terms, and concessions are unrestricted, meaning tenants can spend them on expenses like termination fees from prior leases.
— Andrew Terrell
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