Transwestern to Market 1.2M SF of Suburban Chicago Office for Prime Group
- May 06, 2008
The Chicago office of Transwestern has received the assignment to market and lease 1.2 million square feet of Class A office space in Chicago’s western and northwestern suburbs from owner Prime Group Realty Trust. The space is in three projects totaling six buildings: Olympian Office Center in Lisle; 800 and 810 Jorie Boulevard in Oak Brook; and Continental Towers I, II and III in Rolling Meadows. These buildings had previously been marketed and leased in house; Julie Mertins of Prime will continue to be involved with the marketing/leasing efforts. Transwestern has its work cut out for itself. Fred Ishler, a senior vice president with the firm, told CPN that, for example, of the total 282,000 square feet in Continental III, 126,000 is available. Similarly, of 129,000 total square feet at 800 Jorie Boulevard, 112,000 is available. Further, he explained, locally “the market has been challenging, especially in the northwest suburbs,” which has been hard hit by the subprime-mortgage crisis. Though Continental Towers has not been directly affected, tenants such as Ameriquest and Argent Mortgage “have given back large blocks of space” in the northwestern suburbs, Ishler said. The East-West corridor, home to the other two projects, has fared somewhat better, he said. And he pointed out that the availability of large contiguous spaces in Continental Towers will create leasing opportunities that otherwise would not exist. According to first-quarter figures from Cushman & Wakefield Inc., the Northwest Chicago suburban office submarket has an overall 22.7 percent vacancy rate on a base of 25.3 million square feet. Fortunately, there have been no construction completions there since 2004, which presumably contributes to asking rents holding steady at $21.78. The East-West office submarket has an 18.3 percent vacancy rate, with only one (spec) building of 250,000 square feet due to come online this year. For the overall Chicago suburban office market, Cushman predicts absorption turning more negative as large tenants consolidate space. In 2004, Transwestern took over leasing responsibilities for the former Great Lakes REIT portfolio, which included 1.9 million square feet of office space in suburban Chicago. Within a year, Transwestern drove leasing for the entire portfolio from an average of 65 percent, counting leases about to expire, to an average of 82 percent. Owned by The Lightstone Group, one of the nation’s largest private real estate owners, Prime Group Realty Trust is a REIT that owns, manages, leases, develops and redevelops office and industrial properties, primarily in the Chicago metro area. Transwestern is one of the largest privately held commercial real estate and development firms in the United States.