Fairbridge Properties Buys Chicago Office Asset for $43M
- Aug 13, 2019
Fairbridge Properties has acquired Oak Brook Gateway, a 233,200-square-foot office building in Oak Brook, Ill. The real estate investment company purchased the Class A suburban Chicago asset from The Blackstone Group in a transaction valued at approximately $42.9 million
Oak Brook Gateway, located roughly 17 miles from Chicago at 1111 W. 22nd St., first opened its doors in 1984 as home to New York Life Insurance Co. The Holabird and Root-designed property features such amenities as a conference center, fitness facility café and a four-level parking garage linked to the tower by an enclosed corridor. Currently, the eight-story tower is 93 percent occupied by a roster of 21 tenants that includes Lewis University, the largest tenant in the building with approximately 32,600 square feet, the U.S. Census Bureau and recruitment agency Aerotek, which signed on for 15,000 square feet in 2018.
Fairbridge was attracted to more than Oak Brook Gateway’s solid tenancy, however. The company was lured in by the asset’s location in the East/West submarket, one of suburban Chicago’s top-performing submarkets, as well as continued development in the area.
A windy city welcome
With the acquisition of Oak Brook Gateway, Fairbridge has made its entrée into the metropolitan Chicago market. Chicago continues to serve as a magnet for investors, following a highly active 2018, which closed with $1.4 billion in trades in the suburbs alone. As noted in a 2019 forecast by Marcus and Millichap, a wide array of assets attracts buyers to Chicago. A healthy pace of net absorption of office space and stable asking rent growth continue to sustain investor demand for office properties throughout Chicago.
Notable transactions in suburban Chicago over the last few months include Kore Investments’ $128 million acquisition of the 585,000 Esplanade II in Downers Grove and hair-care billionaire John Paul DeJoria’s purchase of the former McDonald’s campus, a property spanning 80 acres in Oak Brook.