DEERFIELD, IL-Norcross, GA-basedÂ Wells Core Office Income REITÂ has acquired Four Parkway North, a five-storyÂ office propertyhere in the Central North submarket of Chicago. Chicago-based the John Buck Co.â€™s JBC Fund III was the seller of the 172,000-square-foot class A property.
According to an unidentified source not involved in the deal, the building changed hands for $40.9 million or $238 per square foot. Built in 1999, the building is situated just off of I-94 and the Tri-State Tollway, offering easy access to I-294, Chicagoâ€™s Loop, and Oâ€™Hare International Airport.
The building is fully leased to four tenantsâ€”CF Industries Holdings Inc.; Lundbeck Inc.; Randstad Pharma; and Amgen USA. Wells Real Estate Funds, advisor to the REIT, tells GlobeSt.com that the building is fully leased at this time.
â€œFour Parkway North is a strong addition to the Wells Core REIT portfolio,â€ explainsÂ Joe Oglesby, chief investment officer ofÂ Wells Real Estate Funds. â€œIt serves as a headquarters location to three of our tenantsâ€”CF Industries, Lundbeck, and Randstad.â€
Wells was represented internally byÂ Peter Mitchell, senior vice president of capital markets. Mitchell tells GlobeSt.com that â€œFour Parkway North provided an opportunity to acquire a well-located, class-A, 100%-leasedÂ office building in a premier office park.Â This acquisition helps to enhance our industry and tenancy diversification, and the building serves as a headquarters location for three tenants.â€Â
In Chicago, the third largest office market at 235 million square feet, the city had about negative 715, 755 square feet of absorption in the first half, the second highest total occupancy loss in the country, according toÂ recent JLLâ€™s figures. The cityâ€™s vacancy rate stands at about 19.5%. According to Q2 data collected by New York City-basedÂ StudleyÂ and provided to GlobeSt.com, Chicago mirrors the rest of the country with a large mass of class B and lower-rated space, but very little quality office available Like many big US cities, Chicago has no new office construction underway, with little come to market since the recession.
And according to experts, many large markets, such as Chicago, today have the large block demand for around four new office buildings, but are seeing one building announced â€“ or nothing. In Chicago, onlyHinesâ€™ $300 million River Point projectÂ in the River North area is moving forward, having finally closed financing with partnerÂ Ivanhoe CambridgeÂ after a few failed starts since 2008, as GlobeSt.com previously reported. In addition, secondary office is just not ready.
In aÂ recent article, written by GlobeSt.com, the secondary and tertiary markets may have a little bit more to time in the vacancy rinse cycle, saysÂ Dave Menke,Â SVP and general manager of theÂ Opus Group.