Suburban Chicago’s medical office market continued to thrive through the end of 2016, but some uncertainty awaits in 2017.

Check out Bradford Allen’s latest report here.

At mid-year 2016 the total occupancy for on-campus medical office space in suburban Chicago remained flat from the start of the year. Activity and overall deal velocity has remained strong, but the vast majority of Q1 and Q2 deals have not resulted in any positive space absorption. This is due to several ongoing trends:

• “Retail” consolidations of formerly separate offices, usually occurring after multiple independent practices become employed by the same hospital system.

• General space reductions, usually by 5-15% of the total square footage. This stems from medical tenants no longer needing to house medical records on-site, a reduced demand for large private physician offices, and medical equipment shrinking in size due to technological advancements.

There is still ongoing demand for regional hospital systems to continue to merge operations (Northshore and Advocate are the most recent), that these trends in health care real estate will likely continue, resulting in flat absorption rates for vacant space.

Jill’s Top 5 Articles From This Week

1. Bradford Allen Realty Services has arranged a 7,700-square-foot lease renewal in Northbrook, approximately 25 miles northwest of Chicago. Lubin-Bergman Organization Inc. will continue occupying its headquarters in a building located at 5 Revere Drive. – REBusiness
2. What trends in architecture and design for commercial real estate will we see in 2016? Based on the opinion of experts in the field, here are some possibilities: – Chicago Architecture Blog
3. Due to maxing out on current space and staff, many companies will need to expand their office footprint in order to accommodate growth this year, PM Realty Group‘s EVP and managing director Jim Proehl tells GlobeSt.com.
4. Why 2016 is looking like 2015 all over again. The new year in Chicago business is starting out like the old one, with another multibillion-dollar buyout of a local company in the works. Baxalta is in advanced talks to sell itself to Shire for nearly $33 billion in cash and stock, according to Bloomberg News and the Wall Street Journal. – Crain’s Chciago 
5. Chicago-based law firm Clark Hill PLC has doubled its space in its new lease of 71,813 square feet at Prudential Plaza, 130 E. Randolph Street in Chicago.  The move marks a major expansion for the firm. – REJournals

Jill’s Top 5 Articles From This Week

1. The beginning of a tightening cycle is a positive sign for the way experts view the economy, Auction.com‘s chief economist Peter Muoio tells GlobeSt.com. The firm recently released its latest Commercial Real Estate Nowcast, which revealed that commercial valuations in November increased 46 basis points from October. – Globe St.
2. This morning, the U.S. Bureau of Labor Statistics (BLS) released preliminary November 2015 unemployment rates for all Metropolitan Statistical Areas (MSAs). The unemployment rate measures the percentage of the local workforce that reports itself as being out of work, information that the government collects by surveying households. – World Business Chicago
3. The downtown office market continues to heat up as real estate powerhouse John Buck Company has announced a deal for Chicago-based CNA Financial to anchor its upcoming 35-story Class A office tower at 151 N. Franklin. – Curbed Chicago
4. But the office market was strong too, highlighted by the $1.3 billion sale of the Willis Tower in June. Office landlords were also busy chasing big corporate tenants like Kraft Heinz, ConAgra and Motorola Solutions, which all decided to move their headquarters downtown. Here’s a look back at 10 of the biggest deals of the year. – Crain’s Chicago
5. Experts say it’s time to move in these design directions to keep workers engaged and get the most out of your office space. You might think that the reams of analysis done on office space would have by now turned every workplace into a humming hive of engagement and productivity. Earlier this year, we even got an advance look at a research paper that outlined alternative design strategies to make workers happier. – Fast Company

Jill’s Top 5 Articles From This Week

1. Experts say it’s time to move in these design directions to keep workers engaged and get the most out of your office space. You might think that the reams of analysis done on office space would have by now turned every workplace into a humming hive of engagement and productivity. Earlier this year, we even got an advance look at a research paper that outlined alternative design strategies to make workers happier. – Fast Company
2. Biggest Chicago real estate deals of 2015. The Chicago real estate market gained momentum in 2015, as prices kept rising, developers kept building and big tenants kept moving. – Crain’s Chicago
3. The downtown office market continues to heat up as real estate powerhouse John Buck Company has announced a deal for Chicago-based CNA Financial to anchor its upcoming 35-story Class A office tower at 151 N. Franklin. – Curbed Chicago
4. This morning, the U.S. Bureau of Labor Statistics (BLS) released preliminary November 2015 unemployment rates for all Metropolitan Statistical Areas (MSAs). The unemployment rate measures the percentage of the local workforce that reports itself as being out of work, information that the government collects by surveying households. – World Business Chicago
5. The beginning of a tightening cycle is a positive sign for the way experts view the economy, Auction.com‘s chief economist Peter Muoio tells GlobeSt.com. The firm recently released its latest Commercial Real Estate Nowcast, which revealed that commercial valuations in November increased 46 basis points from October. – Globe St.

Jill’s Top 5 Articles From This Week

1. This week in real estate numbers – Bisnow
2. More foreign money than ever has poured into Chicago-area real estate in 2015, and the year isn’t over yet. International investors paid $3.27 billion for properties here through last week, already well above the full-year record of $2.18 billion set in 2013, according to New York-based research firm Real Capital Analytics. – Crain’s Chicago
3. CBRE Arranges 265,000 SF Lease Extension for Law Firm Mayer Brown in Chicago – REBusiness
4. VelocityEHS, a growing Chicago-based software provider, has decided to move its global headquarters from 350 N. Orleans St. in River North to a new space across the street in the Merchandise Mart. The company will sublease more than 90,000 square feet of the Motorola Mobility top floor offices, further boosting the building’s reputation as a hub for the city’s tech scene. – Globe St.
5. From all sides of the country, these new complexes give a whole new meaning to the term “office space.” With the help of our pals at Reis, Bisnow put together this list of the 10 biggest office complexes set to open for business in 2016. – Bisnow

Jill’s Top 5 Articles From This Week

1. The Missner Group will be starting the new year off with a big change. The firm has relocated its Skokie, Illinois-based headquarter offices to accommodate its recent growth. – REJournals
2. This morning, the U.S. Bureau of Labor Statistics (BLS) released preliminary October 2015 unemployment rates for all Metropolitan Statistical Areas (MSAs). The unemployment rate measures the percentage of the local workforce that reports itself as being out of work, information that the government collects by surveying households. – World Business Chicago
3. Brand-new office space is becoming scarce in downtown Chicago after Navigant Consulting leased the largest remaining large block under construction. – Crain’s Chicago
4. Less than a year after raising its biggest investment fund, Harrison Street Real Estate Capital is nearly doubling the size of its headquarters in a move to an office tower under construction on the Chicago River. – Crain’s Chicago
5. H. Ross Ford III, president and CEO of TCN Worldwide Real Estate Services, and David Greene, chairman of the TCN Worldwide Board of Directors, together with Patrick Morrissey, chairman of GVA Worldwide, reveal to GlobeSt.com that the international real estate advisors have agreed to create an alliance that extends the scope and capability of their respective organizations into key strategic markets. – Crain’s Chicago

Jill’s Top 5 Articles From This Week

1. Hamilton Partners has acquired Highland Pointe, a Class A office complex in Lombard, Illinois…Comprised of two buildings, Highland Point totals 388,000 square feet of premium office space in the E/W Corridor. – REJournals
2. After more than two years of waiting and renovating, Google has moved into its new digs in the West Loop. More than 650 Googlers relocated earlier this month from River North to their new offices at 1000 W. Fulton Market. The company will formally open the office with a ribbon-cutting Dec. 3. Like other Google offices, this one will allow pets. – Crain’s Chicago
3. A summary of deals in commercial real estate throughout the Chicagoland area: This week’s Chicago Deal Sheet – Bisnow

4. Glassdoor, the online human resources site where users can rate their bosses and jobs, said it plans to open a Chicago office early next month and hire more than 250 people over the next three years. Glassdoor said this will be the company’s fifth worldwide office and it will announce the Chicago office location “shortly.” – Chicago Business Journal

5. Crowdfunding has become something of a buzzword among investors these days and it’s been particularly well received in the real estate sector. Though it’s still in its infancy, real estate crowdfunding is rapidly reshaping the way individuals find and invest in properties. This shift has brought benefits not only for investors but also for real estate companies and for the real estate market as a whole. – Forbes

Jill’s Top 5 Articles From This Week

1. As experienced real estate professionals can attest, one of the things that make the industry so fascinating is that real estate is, to a large extent, a direct reflection of society: broader social, cultural and professional trends are oftentimes the driving force behind emerging real estate trends. – Globe St.
2. The growing desire among consumers for specially-crafted beers is creating a new niche in the world of commercial real estate, and Chicago is leading the way. That metro area’s craft beer industry had a a 65.9% growth rate between 2013 and 2014, and included 144 existing breweries and 39 others in the planning stage, making it the top craft beer market in the country, according to a new national market study. – Globe St.
3. Many Chicago-area tech firms have recently decided to move their operations downtown to take advantage of city’s huge collection of talent. But some others believe that they can take advantage of what both city and suburbs offer. Brainlab, Inc., a Munich-based medical technology firm, has a newly designed office space at 5 Westbrook Corporate Center in suburban Westchester, and earlier this year it expanded its presence into downtown Chicago by opening a new state-of-the-art customer training center in the iconic Wrigley Building. – Globe St.
4. The developer of a 52-story office tower rising along the Chicago River has scored two more tenants about a year before the building is expected to open. River Point, a high-rise at 444 W. Lake St., is now 70 percent pre-leased after adding two new tenants, developer Hines Interests confirmed. – Crain’s Chicago
5. For years people have talked of turning Chicago into a “Silicon Prairie” meant to rival the nation’s coastal tech hubs, and even though it still can’t quite compete with the actual Silicon Valley, the city has recently emerged as a truly mature tech market. – Globe St.

Jill’s Top 5 Articles From This Week

1. Brainlab, Inc., a Munich-based medical technology firm, has a newly designed office space at 5 Westbrook Corporate Center in suburban Westchester, and earlier this year it expanded its presence into downtown Chicago by opening a new state-of-the-art customer training center in the iconic Wrigley Building – Globe St.
2. River Point, a high-rise at 444 W. Lake St., is now 70 percent pre-leased after adding two new tenants, developer Hines Interests confirmed. – Crain’s Chicago
3. The market has pretty much gotten the message: barring some unforeseen calamity or significant turn in the economy, the Federal Reserve will raise interest rates at its December meeting. That covers the “when.” The folks at Bank of America/Merrill Lynch have started filling in the “how.” How will the Fed raise rates, and how will the market respond to that? – Wall Street Journal
4. As daring a design as the planned Apple retail store near Pioneer Court will have, apparently it is toned down from the original concept. 42nd Ward Alderman Brendan Reilly says he pulled the plug on a large video screen that would have faced the Chicago River. – Loop North News
5. For years people have talked of turning Chicago into a “Silicon Prairie” meant to rival the nation’s coastal tech hubs, and even though it still can’t quite compete with the actual Silicon Valley, the city has recently emerged as a truly mature tech market. – Globe St.

Jill’s Top 5 Articles From This Week

1. The owner of the 26-story tower at 2 N. LaSalle St., a venture led by Norfolk, Va.-based owner Harbor Group International, has struck an agreement with an investor that will provide “a significant equity infusion” to the building, the company said in a statement. – Crain’s Chicago
2. AXIS Reinsurance signed an 11-year lease for 29k SF on the building’s 35th floor, while global investment firm Houlihan Lokey locked down over 57k SF on the 37th and 38th floors for the next 15 years. Both companies are increasing their lease footprints and moving to 111 S Wacker from other buildings. – Bisnow
3. The new owner of the Aon Center said it plans to add an observatory atop the 83-story office tower, a plan that would make Chicago just the second city in North America—and one of the few anywhere in the world—with three observatories. – Crain’s Chicago
4. The Next Hot Thing in Cool Office Design: Now that every big startup has an open seating plan and giant amphitheater, what’s next in office design? We talked with top designers and architects to get their impressions of the present and visions for the future. – Inc.
5. SPINS, which employs nearly 175 people, opened a new headquarters today at 222 W. Hubbard St., near the Merchandise Mart. About 150 people will work downtown. – Crain’s Chicago

Tom’s Recommended Reading for the Week

1. A Look at How DTZ and Cushman & Wakefield’s U.S. Market Coverage Stacks Up – Backed by global investment giant TPG Capital, DTZ’s plan to buy Cushman & Wakefield for a reported $2 billion is the latest and by far largest in a series of high-level moves ushering in major changes across the U.S. commercial real estate services landscape... CoStar
   
2. Adding on to the Willis Tower? – Chicago’s tallest building could get wider, too, now that Blackstone Group has finalized its $1.3 billion acquisition of 110-story Willis Tower today. After closing on its anticipated purchase this afternoon, the New York-based private equity firm is drawing up plans for dramatic changes to the 42-year-old tower… Crain’s Chicago
3. An L.A. idea that smart Chicago landlords may soon steal – Developer Rick Caruso has a new plan for your workday: let your office building do your laundry, shop for groceries, pick up dinner and deliver it all to you by 5 p.m. “After a long day at the office, you want us to pack a couple of steaks and a bottle of wine in your car?… Crain’s Chicago
   
4. South Street Expands Acquisition Scope – South Street Capital, a Chicago based, privately controlled real estate investment firm, has decided to expand the scope of its acquisition strategy into several Midwest states and core areas on the West Coast… Globe St.
5. The $5 billion question: Will WeWork survive the next downturn? – In November, news broke that the shared-office provider WeWork raised $150 million in February 2014 from a number of high-profile investors, including Boston Properties’ Mort Zuckerman. The deal valued WeWork at $1.5 billion and catapulted it into the limelight. It was suddenly a “unicorn,” Silicon Valley-speak for a company that races to a $1 billion-plus valuation based on fundraising… The Real Deal 

Tom’s Recommended Reading for the Week

1. 222 N LaSalle Signs Another Tech Firm – The owners of 222 N. LaSalle in downtown Chicago have launched an effort to make the 26-story tower into a destination for technology, advertising, media and information companies. And they recently scored another success by signing online personal lending company Avant Credit to a long-term lease for about 78,794 square feet... Globe St. 
   
2. Is Chicago’s Next Big Neighborhood… The Loop? – During the build up to this year’s mayoral and aldmeranic elections, Chicago’s downtown was often depicted as the gluttonous beneficiary of preferential investment at the expense Chicago’s spurned neighborhoods… ChicagoNow
3. Rejecting the Cubicle for an Expanse of Space – In the era of the coffee-shop office, where a bit of countertop can be enough room from which to run a business, some tenants in New York are clamoring for a very different kind of workplace: one that spans a cavernous 100,000 square feet or more… New York Times
   
4. Rents rising for Chicago’s premier high-rise offices – Rents are on the rise in Chicago’s premier office buildings, according to a new report from JLL, a commercial real estate firm. Gross asking rents at Chicago’s 65 so-called skyline buildings rose 99 cents to $37.93 per square foot last year. In 2013, rents rose 47 cents to $36.94… Chicago Tribune
5. Why tech loves quirky, old buildings – As giants like Facebook and Google build shiny new cities in Silicon Valley, other technology companies are doing just the opposite to the national office landscape. They are revitalizing and transforming older buildings and breathing new life into a market that had been on life support… CNBC

Tom’s Recommended Reading for the Week

1. Developer promises unique workplace on ex-Motorola campus in Libertyville – Aside from the new sign, there isn’t much evidence of activity at the vast, empty space that once housed Motorola Mobility on Route 45 south of Winchester Road in Libertyville... Daily Herald
   
2. In Real Estate, Branded Content Is News – Big-name real estate services firms are joining the rush of businesses into new types of marketing that blur the lines between journalism and branding. With a splashy party last week at O’mar’s La Ranita, residential powerhouse Douglas Elliman relaunched Elliman as a lifestyle magazine… Wall Street Journal
3. Online savvy helps commercial real estate professionals do better business offline – Despite what many in our field might think, commercial real estate isn’t just about sales; it’s about building relationships. As our industry expands and the tools available to us evolve, so too must our approach to business… RE Journals
   
4. Plenty of rivals are following WeWork into co-working competition – Co-working company WeWork’s decision to open a 105,000-square-foot space in River North may throw a scare into a niche once characterized by local players while affirming that the little guys were on to something big all along… Crain’s Chicago
5. Willis Tower buyer Blackstone pounces on former Apparel Center – Blackstone Group is close to taking over Chicago’s tallest building, but the private-equity giant isn’t stopping there. New York-based Blackstone has agreed to pay about $390 million for the former Apparel Center, now called River North Point, according to people familiar with the transaction… Crain’s Chicago

Tom’s Recommended Reading for the Week

1. Barriers to Entry Limiting Downtown Construction – For the last 20 years, the barriers to entry to build Downtown office were not very high. That’s all changing, one reason we’re excited to present Bisnow’s A New Downtown: Leasing, Development and Investment event May 14, starting at 7am at theMart... Bisnow
   
2. Chicago landmarks commission approves Fulton-Randolph landmark district – A city panel today signed off on a proposed landmark district in the Fulton-Randolph area of the West Loop, a proposal that has drawn strong opposition from many property owners in the neighborhood. The measure would restrict the demolition or alteration of buildings in the proposed district, which would cover 74 acres stretching roughly from the… Crain’s Chicago
3. Cushman & Wakefield sold to Chicago-based DTZ parent, TPG Capital – The Midwest commercial real estate market continues to heat up. Office product, in particular, is performing well. And while prices are up in markets across the country, investors are increasingly targeting the Midwest as a source of great value and quality opportunities. At a time when big coastal markets have seen prices recover up to (and in some cases above) pre-recessionary highs… Crain’s Chicago
   
4. Hinshaw & Culbertson plans move to new Loop tower by John Buck – Law firm Hinshaw & Culbertson is close to a deal to move to a 36-story Loop office building planned by Chicago developer John Buck, a key step that could launch the third new office tower in the city since the recession. Chicago-based Hinshaw is in advanced talks to lease about 100,000 square feet in the proposed tower at 151 N. Franklin St., according to people familiar with the deal… Crain’s Chicago
5. How to Play the CRE Consolidation Game – As someone who has been active in the mergers and acquisitions world within the commercial real estate industry for the last two decades, I’ve observed the numerous transformations and adjustments commercial real estate has undergone—some of the changes have been good, some bad, but each has had a lasting impact in varying degrees…  NREI

Tom’s Recommended Reading for the Week

1. CMBS Late-Pays Tick Down – The delinquency rate for CMBS has been caught in a tug of war between old and new deals. However, Trepp LLC says the late-pay rate saw a decline of one basis point in April after holding steady in March. “The delinquency rate has been bumping along for the last few months, as two competing forces keep it fairly level,” says Joe McBride, research associate at New York City-based Trepp... Globe St.
   
2. Instagram’s Role in Commercial Real Estate – Instagram, which has become the preferred social-media tool for many New York residential real-estate brokers, is beginning to show up more in the commercial real-estate brokerage business as well. Commercial firms and brokers remain much heavier users of Twitter and LinkedIn for such things as leads, contacts and recruiting… Wall Street Journal
3. Investors targeting office properties in Chicago, Columbus, Detroit and other Midwest markets – The Midwest commercial real estate market continues to heat up. Office product, in particular, is performing well. And while prices are up in markets across the country, investors are increasingly targeting the Midwest as a source of great value and quality opportunities. At a time when big coastal markets have seen prices recover up to (and in some cases above) pre-recessionary highs… RE Journals
   
4. Schaumburg planning to redevelop much of Motorola site – As Motorola Solutions prepares to downsize its longtime corporate campus in Schaumburg without disappearing from the suburb altogether, village officials are making plans for the land the tech company will leave behind. Schaumburg’s planning, building and development committee… Daily Herald
5. US drives Y-O-Y Sale Gains – Fueled partly by a record quarterly high in cross-border investment, US commercial property sales volume was up 49% year over year for the first quarter, Real Capital Analytics said Thursday. The $114.4 billion in domestic sales accounted for more than half the Q1 global total of $207.8 billion… Globe St.

Tom’s Recommended Reading for the Week

1. Companies Trade Suburbs for City Life – Earlier this month, online travel agency Expedia Inc. said it plans to relocate its headquarters from a Seattle suburb that it has called home for nearly 20 years to the city’s downtown. That announcement was the latest in a string of high-profile companies making moves from the suburbs back to the city... Wall Street Journal
   
2. In Real Estate Tech Firms, Europe Plays Catchup With U.S. – Startups in Europe’s real-estate market that offer virtual-reality tours, online leasing marketplaces and other technology services are catching investors’ eyes, but they will have to outmuscle more established, better-funded U.S. companies to succeed. London-based Virtual Walkthrough offers real-estate agents and developers digital visits of properties for sale or rent. The company secured its first £800,000 ($1.2 million) of funding in January 2014, said co-founder James Morris-Manuel… Wall Street Journal
3. Measuring Up: The Long and Short of IPMS for Office Buildings – So, just how big is your building? Did you know that your property could shrink or grow in size simply depending on where it is located? Historically, commercial property has been measured differently throughout the world. According to research by global property giant JLL, depending on the measurement standard used, the area quoted in different markets for an equivalent building could vary by as much as 24 percent… NREI
   
4. Preservationists, building owners debate Fulton Market historic district – Preservation groups voiced support Thursday for a city proposal to create a historic landmark district in the booming Fulton Market area, Chicago’s surviving wholesale food market. But many business and property owners oppose the designation because of the restrictions it would place on their ability to develop buildings… Chicago Tribune
5. WeWork bringing its model of larger coworking spaces to Chicago – The total membership of WeWork would fill many a Chicago suburb. The New York-based coworking company, a startup that boasts 25,000 members worldwide, has elbowed its way into an already busy Chicago market, planning to open a space in River North at 111 W. Illinois St. on Friday. Later this year, the company will open six floors of space in the West Loop at 210 N. Green St., further evidence of a coworking movement that’s tapping into the needs of larger and more diverse organizations, industry experts said… Chicago Tribune

Tom’s Recommended Reading for the Week

1. Avison Young acquires Chicago’s Mesa Development – A Chicago developer that built two condo towers at Millennium Park has been acquired by a Canadian firm. Toronto-based Avison Young announced the deal this morning for Mesa Development, founded in 2000 by Richard Hanson. He and James Hanson have joined Avison Young’s downtown office as principals... Crain’s Chicago
   
2. Chicago beats even Silicon Valley in tech-job growth – Chicago was one of the fastest-growing cities for tech jobs coming out of the recession. The number of tech jobs in the city rose 25.8 percent between 2010 and 2013, according to a report on the nation’s top tech markets by commercial real estate firm CBRE… Crain’s Chicago
3. CMBS lending to Chicago-area landlords drops after strong 2014 – After showering local landlords with $2.5 billion in debt last year, Wall Street lenders are off to a slow start here in 2015. Lenders that package real estate loans into commercial mortgage-backed securities (CMBS) originated and sold off $2.5 billion in loans on Chicago-area properties in 2015… Crain’s Chicago
   
4. Cushman & Wakefield buying McKinney brokerage – J.F. McKinney & Associates, a Chicago real estate brokerage that handles leasing at office buildings including the John Hancock Center and the Merchandise Mart, is being acquired by industry behemoth Cushman & Wakefield. The deal is expected to be completed by April 30, according to New York-based Cushman & Wakefield. Terms of the deal were not disclosed… Crain’s Chicago
5. Investors Turn to Big Real Estate Funds – Investors are pouring more money into real-estate funds than they have since the property bust, but a few giant fund firms are collecting the lion’s share of the spoils. Pension funds, endowments and other big institutional investors are putting more cash into private-equity firms with large real-estate funds and strong track records, leaving smaller firms to fight over the scraps… Wall Street Journal

Tom’s Recommended Reading for the Week

1. Law Firms Looking to Downsize – The business model for most law firms is changing dramatically, and according to a new report from Colliers International, over the next few years many will seek to right-size their real estate portfolios. Except at the very top tier law firms.. Globe St.
   
2. Mizachi, Werner sell land beneath West Loop office building – After bids fell short of their target sale price, owners of a big West Loop office tower are trying a new approach: splitting it in two. A venture of Florida-based investor Joseph Mizrachi and New York-based David Werner sold the land beneath 300 S. Riverside Plaza for $220 million. Now they’ll try again to sell the nearly 1.1 million-square-foot office building on it… Crain’s Chicago
3. Morton Salt plans new West Loop HQ at River Point – Morton Salt’s headquarters and a satellite office for Allstate are ticketed for a West Loop development along the Chicago River, continuing a run of deals for the two office towers under construction downtown… Crain’s Chicago
   
4. Optimus moving HQ to a (very) high-profile address – Optimus President Tom Duff said today that his post production company, one of the largest in Chicago, will in late fall of this year move from its longtime home at 161 E. Grand Ave. in the city’s Streeterville neighborhood to the iconic Wrigley Building at 410 N. Michigan Ave… Chicago Business Journal 
5. Suburban Chicago office vacancy falls, JLL reports – Vacancy in suburban Chicago office buildings fell to its lowest level in more than seven years during the first quarter, providing another positive sign for landlords battered during the recession… Crain’s Chicago

Tom’s Recommended Reading for the Week

1. Blackstone to Buy Willis for $1.3 Billion – Blackstone Group LP has agreed to buy the iconic Willis Tower for $1.3 billion, the most ever paid for a US office building outside of Manhattan, the Wall Street Journal reported last night. The sellers, New York-basedJoseph Chetrit and Joseph Moinian and Skokie, IL-based American Landmark Properties paid $841 million for the building… Globe St.
   
2. Guardian Life files to foreclose on Hoffman Estates office property – The owners of a Hoffman Estates office property have been hit with a $21 million foreclosure suit, an increasingly rare event amid a recovering suburban office market. An affiliate of New York-based Guardian Life Insurance Co. of America sued an affiliate of Stonegate Properties that owns Northwest Corporate Centre, a 12-building complex at 2500 W. Higgins Road. The Stonegate venture failed to pay off a $21 million loan on the property when it came due in March 2014… Crain’s Chicago
3. Sam Zell’s latest stab at market timing – Sam Zell gained a reputation for impeccable timing with the $39 billion sale of Equity Office Properties Trust on the eve of the 2007 financial collapse. Eight years after that deal with private-equity firm Blackstone Group, the Chicago real estate billionaire wants to prove he still knows when to head for the exits… Crain’s Chicago
   
4. Updates to the John Hancock could include name change – On the heels of news that the Willis Tower — nee Sears Tower — is changing hands, Sneed hears the Hearn Company — which owns the commercial portion of the John Hancock Center — is proposing changes to the historic structure… Chicago Sun-Times
5. River North office building sells for $8.2 million – A group led by Chicago trader and investor Michael Palumbo paid $8.2 million for a fully leased loft office building in River North, betting the neighborhood’s office boom will continue. Ceres Acquisitions, a company led by Palumbo, teamed up with Chicago-based Elmdale Partners in the purchase of 435 N. LaSalle St. a 50,000-square-foot brick office building built in 1906. They acquired the property… Crain’s Chicago

Tom’s Recommended Reading for the Week

1. Blackstone in talks to buy Willis Tower – Willis Tower, Chicago’s tallest building, may soon have an equally big owner: Blackstone Group, the world’s largest private equity real estate owner. New York-based Blackstone has a preliminary agreement to pay almost $1.5 billion for Willis Tower, according to a person familiar with its plans. Blackstone representatives have been visiting the building to perform due diligence on the 110-story icon, and it is looking to buy the West Loop tower for one of its funds… Crain’s Chicago
   
2. Delinquencies on Chicago-area CMBS loans hold below 5 %, according to Trepp – Rising rents and property values are lifting more Chicago-area landlords out of loan trouble, but a day of reckoning awaits some. The delinquency rate on Chicago-area commercial mortgage-backed securities (CMBS) loans dipped to 4.11 percent in December… Crain’s Chicago
3. Loop tower sold to White Oak, Angelo Gordon venture by Ares Management – Wabash Avenue, critically located between the tourist attractions on Michigan Avenue and shopping on State Street, is poised to undergo a significant makeover.After more than a year spent collecting input and brainstorming, the Chicago Loop Alliance, the organization that promotes the downtown business district… Crain’s Chicago
   
4. River North Property Reaches 50% Leased – Bradford Allen has just completed five new leases at 363 W. Erie St. in the River North neighborhood, bringing the office building to about 50% occupancy within 90 days of the commencement of a major renovation to the building… Globe St.
5. Trunk Club expands in River North, Goose Island – Men’s clothing startup Trunk Club is trying on new real estate in its hometown amid rapid growth that includes plans to add a women’s brand. The Chicago-based company, which sends cardboard trunks of clothes to customers, subleased 17,000 square feet of office space across the street from its River North headquarters and showroom. About 1½ miles north, Trunk Club leased 170,000 square feet of warehouse space on Goose Island… Crain’s Chicago

Tom’s Recommended Reading for the Week

1. Chicago Named “Top Metro” for New and Expanding Companies – Mayor Rahm Emanuel today announced that for the second year in a row, Chicago was named the “Top Metro” in the nation* for corporate investment by Site Selection magazine, considered the “industry scoreboard for corporate investment and relocation professionals… World Business Chicago
   
2. Chicago’s Willis Tower is on the market – and could fetch $1.5 billion – A potential sale is in the works for Chicago’s tallest building, a deal that could fetch almost $1.5 billion and shatter the city’s price record amid soaring property values downtown. The owners of the Willis Tower have hired Eastdil Secured to seek a sale, according to an offering book already given to potential buyers… Crain’s Chicago
3. Group lays out its plan to spiff up Chicago’s Wabash Avenue – Wabash Avenue, critically located between the tourist attractions on Michigan Avenue and shopping on State Street, is poised to undergo a significant makeover.After more than a year spent collecting input and brainstorming, the Chicago Loop Alliance, the organization that promotes the downtown business district… Chicago Tribune
   
4. Mead Johnson moving headquarters to downtown Chicago – Baby formula company Mead Johnson Nutrition is moving its headquarters to downtown Chicago from north suburban Glenview. Mead Johnson will bring 200 workers to River Point, a 52-story office tower under construction in the West Loop, the company and Mayor Rahm Emanuel announced today. Crain’s reported earlier today that Mead Johnson planned to move to the tower at 444 W. Lake St. along the Chicago River… Crain’s Chicago
5. The Case Against Open Offices – I love the constant frenzy of activity at 1871’s front door. There are more than a thousand people a day regularly passing through it. There are visitors stopping by for a press conference or to attend a class, lecture, or luncheon… Chicago Tribune 

Tom’s Recommended Reading for the Week

1. Dolce Living Communities buys vintage Loop office building from Hamilton Partners – A Florida residential developer bought a 115-year-old LaSalle Street office building, likely signaling another change in a nook of the Loop where several vintage office properties are being reincarnated… Crain’s Chicago
   
2. Gogo to expand at Sterling Bay building in West Loop – Gogo is adding more jobs at its new West Loop headquarters. In 2013, the inflight wireless provider decided to move its corporate offices from Itasca to 111 N. Canal St., where it would employ 500 people and occupy 232,000 square feet… Crain’s Chicago
3. How does branding work in real estate? – Is branding important to real estate? Most of us give it lip service but think that it is dwarfed in importance by the deal terms around a real estate transaction – T.I. dollars, lease terms, CTL financing and cap rates. The prevailing opinion in our industry (which I’ve heard verbatim numerous time) runs along these lines… RE Journals
   
4. Suburban co-working movement building slowly in Geneva, Naperville – A handful of co-working centers are establishing themselves in the suburbs, but the idea of a place where independent professionals come together, share space and form a community is a tough sell among suburbanites… Daily Herald
5. West Loop office tower in Chicago for sale – The Congress Center is going up for sale about 2½ years after injection of fresh cash pulled the West Loop office tower out of distress. A venture of New York-based Northwood Investors hired the Chicago office of HFF to broker a sale of the 16-story office tower at 525 W. Van Buren… Crain’s Chicago

Tom’s Recommended Reading for the Week

1. Fresh Thyme grocery chain to move to Downers Grove, open Elston store – An organic grocer that plans an ambitious expansion across the Midwest has inked deals for two more Chicago-area stores as it prepares to move its headquarters to Downers Grove from Phoenix. Fresh Thyme Farmers Market signed a 15-year lease for its first store in the city, at 2500 N. Elston Ave… Crain’s Chicago
   
2. Illinois tops LEED rankings from USGBC – Illinois led the nation in building space certified as environmentally friendly for the second straight year, according to a report. The U.S. Green Building Council’s report yesterday named the top 10 states for buildings certified as “LEED,” which stands for Leadership in Energy & Environmental Design… Crain’s Chicago
3. John Buck lands Freeborn & Peters for new Loop office tower – A third new office tower could soon rise in downtown Chicago, with law firm Freeborn & Peters agreeing to move into a 36-story project developer John Buck plans in the Loop. Freeborn & Peters has signed a letter of intent for offices in an 800,000-square-foot tower at 151 N. Franklin St… Crain’s Chicago
   
4. Sterling Bay Gets $220M Refi for 1KFulton – Mesa West Capital has provided Sterling Bay with $220 million to refinance its 1KFulton project in the West Loop. The Chicago-based developer bought the former Fulton Market Cold Storage warehouse in 2012 and renovated it into a 535,000-square-foot office building thatGoogle will soon use as its new regional headquarters… Globe St.
5. Suburban Chicago office building sales jump in 2014 – Sales of suburban office buildings surged to $1 billion last year, the highest volume since the crash. Suburban office sales rose almost 20 percent from about $865 million in 2013, the third straight year of rising sales but still only about half the 2007 peak of $2.09 billion… Crain’s Chicago

Tom’s Recommended Reading for the Week

1. 2015 Healthcare Outlook – The market for medical office real estate (MOB) has changed dramatically during the last few years. Once a fringe product type, MOB is inching towards the spotlight as a main-stream real estate investment. The space, once dominated by a handful of healthcare REIT’s, has expanded… RE Journals
   
2. Chicago’s Civic Opera Building for sale, could fetch $210 million – A venture of Nanuet, N.Y.-based Berkley Properties has hired the Chicago office of HFF to find a buyer for the 44-story, 915,164-square-foot tower at 20 N. Wacker Drive. People familiar with the building estimate it could sell for more than $210 million, or more than $230 per square foot… Crain’s Chicago
3. The Rise of the 18-Hour City – One of the biggest findings of the 2014 PWC Real Estate Investor Survey has been the rise of “18-hour” cities, or second-tier cities, as opposed to the 24-hour gateways. NREI spoke with Mitchell Roschelle, the U.S. national practice leader for PwC’s real estate advisory practice and the publisher of the survey, about the implications of this trend… NREI
   
4. Union Station Rehab Project To Get $12 Million from Amtrak – Amtrak will contribute $12 million for major renovations at Union Station, the city announced Thursday morning. The contribution is the first step in the Chicago Department of Transportation’s ambitious Union Station Master Plan, which calls for roughly $500 million to completely overhaul the 90-year-old station at South Riverside Plaza and has been in development for more than three years. Union Station’s last major renovation was in 1989… DNA Info
5. With debt woes over, Loop office tower selling for $65 million – After surviving the real estate crash and a legal skirmish with a lender, the owners of a 1960s Loop office tower are poised to cash in with a nearly $65 million sale. A venture of Chicago-based real estate investors Fulcrum Asset Advisors and Diversified Real Estate, whose founders include restaurateur Larry Levy, have an agreement to sell the 24-story tower at 33 N. Dearborn St. for almost $65 million, according to people familiar with the deal… Crain’s Chicago

Tom’s Recommended Reading for the Week

1. Coworking 2.0: Collaboration meets privacy in the workplace – Last year marked the 50th anniversary of the cubicle, and while few people dispute the impact this workplace wonder has had on office design and culture, most agree that cubicles have come to symbolize the old way of doing business. Today, companies have transitioned to more open floor plans designed to foster creativity and collaboration among employees. In fact, open offices accounted for 70 percent of workplaces in a 2010 survey conducted by the International Management Facility Association… RE Journals
   
2. JLL snares tech-focused broker Cassata from CBRE – Office leasing broker Chris Cassata, who has signed some of the technology sector’s biggest names to leases in Chicago, joined Jones Lang LaSalle after 14 years at rival CBRE. Cassata, 38, who has represented Chicago developer Sterling Bay in leases with tenants including Google and Twitter, will focus on adding new assignments outside the realm of traditional glass-and-steel skyscrapers… Crain’s Chicago
3. Millennials Prefer Single-Family Homes in the Suburbs – One of the hottest debates among housing economists these days isn’t the trajectory of home sales, but whether millennials, those born in the 1980s and 1990s, want to remain urbanites or eventually relocate to the suburbs. Some demographers and economists argue that the preference of millennials, also called Generation Y, for city living will remain long lasting. And surveys of these young urban residents have tended to show that they don’t mind small living quarters as long as they have access to mass transit and are close to entertainment… Wall Street Journal
   
4. Should Core Investors Chase Yield Into Slower Growth Markets? – Commercial real estate investors are flocking to secondary and even tertiary markets in search of yield. This is due to a variety of factors, including an overall low yield environment and risk complacency. In addition, similar to the Federal Reserve “crowding” investors out of Treasuries into higher yielding investments, foreign buyers of U.S. commercial real estate are “crowding” domestic investors out of gateway office markets into higher yielding secondary and tertiary markets… NREI
5. Top 5 Predictions for Medical Office Real Estate in 2015 – The “retailization” of healthcare will continue to increase this year, according to executives at Revista, an Annapolis, Md.-based research firm that focuses on the medical real estate industry. Revista was founded in 2013 by seniors housing industry veterans Elisa Infante Freeman, Mike Hargrave and Hilda Flower Martin. The company tracks investment sales and construction statistics in the medical office sector, as well as publishing the Top 50 Owners report for the industry. … NREI

Tom’s Recommended Reading for the Week

1. Commercial Mortgage-Backed Securities Make Comeback – A hunt for yield and a gradually improving property market are bolstering a key engine of U.S. commercial property lending, helping borrowers to refinance but also reigniting fears the market is getting overheated. In all, lenders made $94 billion in loans bundled together and sold off as bonds to investors in 2014, the most since 2007 for the product known as commercial mortgage-backed securities, according to trade publication Commercial Mortgage Alert… Wall Street Journal
   
2. Cyber sleuths move HQ to Chicago – Take that, all you evil-minded hackers! A fast-growing global cybersecurity company is moving its headquarters here. Prescient Edge, which has the likes of ex-Green Berets and federal intelligence agents in its executive suite, is setting up shop at One Prudential Plaza, where it is leasing about 24,000 square feet of space, according to the city and the company. Prescient Edge now is based in McLean, Va., not too far from Washington… Crain’s Chicago
3. Jewel Osco HQ sold to Hamilton Partners – Feeling more optimistic about the suburban office market, Hamilton Partners added Jewel-Osco’s headquarters to its shopping cart for almost $24 million. The Itasca-based developer and investor bought the 185,020-square-foot office building at 150 Pierce Road in west suburban Itasca on Dec. 30 for $23.7 million, or about $128 per square foot, according to DuPage County records. The seller was Bethesda, Md.-based pension fund adviser ASB Capital Management… Crain’s Chicago
   
4. Mezzanine Financing on the Upswing as Industry Sees More Construction – Borrowers have a growing appetite for mezzanine loans that is fueled by redevelopment and refinancing activity, as well as the return of new construction. Terra Capital Partners, a New York-based fund manager, has seen its mezzanine lending volume double over the past year and the firm expects that volume to double again in 2015. Although Terra Capital Partners does not disclose its total lending volume, it provided mezzanine or bridge financing on about 40 different projects last year. Mezzanine capital typically goes higher on the “capital stack” of project financing, layering on top of a first mortgage to provide a borrower with higher leverage… NREI
5. Prices for Office Assets in CBDs Are on a Tear – Stronger job growth over the past year is beginning to have an impact on office building valuations, as Moody’s/RCA Commercial Property Price Indices (CPPI) registered an 8.6 percent increase in prices for office assets in Central Building Districts (CBD) in the three months ending in November 2014. The sector was the best performing of all core commercial property types at a time when commercial prices as a whole continued to go up. CBD office buildings have now recovered 145.6 percent of their losses peak-to-trough. All commercial properties taken together have recovered 105.8 percent of their losses… NREI

Tom’s Recommended Reading for the Week

1. Office Market Sees Tepid Recovery – U.S. companies are adding employees at the fastest rate in years. But those workers aren’t filling up office buildings like they used to. While the labor force finally has pushed past its prerecession peak, readings on office-space usage have barely budged. The vacancy rate stood at 16.7% in the fourth quarter, down only a hair from the 16.9% registered a year earlier and compared with the postrecession peak of 17.6% reached in 2010, according to data from real-estate research firm Reis Inc… Wall Street Journal
   
2. Offices to Become More Like Home in 2015 – In the past several years, office users across the nation began transforming their spaces from old-style cubicle designs into more collaborative arrangements. In addition, many sought to shrink their footprints by using space in a more efficient manner. And as office users look to the year ahead, experts say that other changes are underway… Globe St.
3. Rising tide lifts DuPage office market – The effects of the improving economy are being felt in the suburban Chicago office market, where conditions are tightening and shifting the landscape for companies that do business here. A microcosm of this dynamic can be found in DuPage County’s sprawling East-West Office Corridor, which runs along a 20-mile stretch of Interstate-88 from Westchester to western Naperville… Daily Herald
   
4. Suburban Chicago office vacancy rate drops to six-year low – Suburban office landlords entered 2015 with a burst of leasing momentum rarely seen since the recession. Office vacancy in suburban Chicago fell to 22.6 percent in fourth-quarter 2014, down from 23.4 percent in the previous quarter and from 24.3 percent a year earlier, according to Chicago-based Jones Lang LaSalle. The vacancy rate is at its lowest level in more than six years… Crain’s Chicago
5. VisaNow moving HQ to Chicago’s Loop amid quick growth – With a $16 million cash infusion and plans to more than double its workforce within 18 months, visa processing firm VisaNow is moving its Chicago headquarters. VisaNow signed a lease for about 30,000 square feet at 230 W. Monroe St., with an option to add another 20,000 square feet in the Loop tower, CEO Bob Meltzer said. VisaNow helps companies secure visas for their workers… Crain’s Chicago

Tom’s Recommended Reading for the Week

Check out the top Chicago commercial real estate news before heading into the weekend!

1. Cadence Health moving 170 jobs to Cantera in Warrenville – Cadence Health signed a nearly 55,000-square-foot lease in a west suburban office park to bring administrative staff closer to two of its cancer treatment centers. The Winfield-based health system in October signed the 54,798-square-foot lease at Keystone, a building at 4525 Weaver Parkway in the sprawling Cantera business park in Warrenville, according to CBRE Inc., which brokered the deal. Terms of the lease were not disclosed… Crain’s Chicago
   
2. Demand for Office Space Heats Up as FIRE Sectors Recover – Professional services that have traditionally led demand for office space, including finance, insurance and real estate, have finally made a comeback after a slump following the recession. Office market experts hope that the sectors, collectively referred to as FIRE, will now join with the tech and energy industries to heat up office demand in primary cities in 2015… NREI
   
3. Fulton Market landmark plan draws strong opposition – Opponents of the city’s plans to name the Fulton Market meatpacking area a historic district took their fight to City Hall on Wednesday, where they demanded Mayor Rahm Emanuel abandon the “forced landmarking” of their properties. Roger Romanelli, executive director of the Randolph Fulton Market Association, and about 20 critics of the proposed designation protested outside Mayor Rahm Emanuel’s office… Chicago Tribune
   
4. Prudential paying $370 million for 55 E. Monroe – Prudential Real Estate Investors agreed to pay more than $370 million for an East Loop office building, the latest deal in a memorable year for high-dollar sales downtown. The unit of the New Jersey-based financial services giant has a deal to buy the almost 1.3 million square feet of office and retail space at 55 E. Monroe St. for more than $290 a square foot… Crain’s Chicago
5. Why suburban companies like McDonald’s follow the siren call of downtown – The trend of suburban corporations adding satellite offices downtown has become super-sized. Oak Brook-based McDonald’s, the embodiment of the sprawling suburban office campus, disclosed plans Dec. 9 to open a River North office as soon as January. Following similar moves by behemoths such as Walgreen, Kraft Foods Group, Sears Holdings and Motorola Mobility, McDonald’s plan demonstrates the increasing importance large corporations are placing on downtown real estate in recruiting and retaining younger employees… Crain’s Chicago

Tom’s Recommended Reading for the Week

Check out the top Chicago commercial real estate news before heading into the weekend!

1. Chicago area’s bad real estate debt drops to lowest level since 2008 – Bankers who get paid to fix broken real estate loans may soon need to find a new line of work. The delinquency rate for bank loans on local income-producing properties dropped to 3.8 percent in the third quarter, down from 4 percent in the second quarter and 4.5 percent a year earlier, according to New York research firm Trepp… Crain’s Chicago
   
2. Global Investors Driving Chi. Office Market – Investors across the country and from around the world continue to find Chicago one of the most attractive markets in the US. That was proven yet again this week when Heitman bought 353 N. Clark St., a 46-story tower in the River North neighbourhood, after beating out a crowded field of investors. Cook County property records show that the company paid the seller, Tishman Speyer, $715 million for the 1.2-million-square-foot property, or roughly $609 per-square-foot, the second-highest ever paid for a Chicago office building… Globe St.
   
3. McD’s opening corporate office in River North – McDonald’s will open a corporate office in River North in the first quarter of 2015 in a play to recruit better tech talent, an executive said tonight. Some of the company’s growing digital strategy team, designers and business development employees are expected to move into the new office from corporate headquarters in Oak Brook, said Steve Easterbrook, senior executive vice president and global chief brand officer. “Having boots on the ground in the city is a huge opportunity for us,” Easterbrook said following an innovation event downtown… Crain’s Chicago
   
4. Full Service Brokers Give Tenants Best Deal – The debate over whether tenant-only brokerage firms are better for tenants flared recently with the release of a report that found full service firms will favor landlords over tenants when representing both in a deal. We looked at that report’s findings yesterday in this article – a report, it must be noted again, that was commissioned by Cresa. The actual study was conducted by George Washington University and Peter Smirniotopoulos, founder and principal of petersgroup consulting and an adjunct professor of Real Estate at George Washington University… Globe St.
5. Tribune Tower redevelopment under consideration – The landmark Tribune Tower may become part of a major Michigan Avenue redevelopment project. Tribune Media, which owns the iconic neo-Gothic tower, unveiled broad plans at a New York investor presentation Thursday that could potentially triple the building’s space with residential, retail and hotel components. “Tribune Tower, our iconic office tower, it sits in one of the best locations in Chicago — Michigan Avenue at the river — and it’s a prime candidate for redevelopment,” said Murray McQueen, president of Tribune Real Estate… Chicago Tribune

Tom’s Recommended Reading for the Week

Check out the top Chicago commercial real estate news before heading into the weekend!

1. Apollo buys Kemper Lakes office complex outside Chicago – A New York-based investment manager paid $127 million for the Kemper Lakes Business Center, after a previous deal for the Long Grove office campus fell apart. Apollo Global Management, which oversees about $164 billion in assets, completed the deal Nov. 12, according to Lake County property records. An Apollo fund bought the four-building property from Equus Capital Partners, according to people familiar with the deal. Apollo stepped in to fill the void left after insurer MetLife walked away from a $130 million deal for the 1.1 million-square-foot complex earlier this year… Crain’s Chicago
   
2. AT&T Building in downtown Chicago for sale by Kushner – The owner of a 30-story West Loop office tower leased to AT&T is ready to cash in on investors’ continued interest in the 312 area code. New York-based Kushner Cos. hired the Chicago office of HFF to seek a sale of 225 W. Randolph St., which it bought for about $275.7 million in late 2007. In a somewhat unusual move, the AT&T Building is being offered for a specific price… Crain’s Chicago
   
3. Chicago-area commercial construction contracts up – New commercial real estate projects are powering the local construction industry, a welcome change for contractors who wondered five years ago if they’d ever bid on an office tower or shopping center again. Contracts for commercial and residential construction projects in the Chicago area totaled $8.6 billion over the first 10 months of the year, up 16.3 percent from a year earlier, according to Dodge Data & Analytics, a data provider formerly known as McGraw-Hill Construction… Crain’s Chicago
   
4. Mizrachi plans 41-story office and hotel tower in Chicago’s West Loop – Jumping into an already competitive field of downtown office developments, a West Loop landlord unveiled plans for a 41-story tower that would include a four-star hotel topped by office space. Joseph Mizrachi, who led a group of investors that bought the 1.1 million-square-foot office tower at 540 W. Madison St. in December 2012, heads a venture to develop land on the west side of the 23-story building. The site was part of the $350 million acquisition… Crain’s Chicago
5. Study Reignites Debate About Broker Interests – A new study by George Washington University’s Center for Real Estate and Urban Analysis has rekindled the debate over whether there are conflicts of interest at some of the country’s largest commercial real estate brokerages. Brokers who represent only office tenants have argued for years that conflicts exist at firms that represent both landlords and tenants—and that their tenant clients often suffer as a result… Wall Street Journal

Tom’s Recommended Reading for the Week

Check out the top Chicago commercial real estate news before heading into the weekend!

1. Corporations Prepare for Upcoming Lease Accounting Changes – Corporations have resigned themselves to the fact that, at some point, new lease accounting standards will be in place that will effectively shift leases from off-balance sheet to on-balance sheet reporting. Although the big question still remains as to when those new rules will become effective, companies are already preparing for the new requirements… NREI 
   
2. Golub/Alcion Launch Oak Brook Renovation – The suburban office market may suffer from an overall high vacancy rate, but some investors still see opportunities. As reported in GlobeSt.com yesterday, for example, Golub & Company and its partner Alcion Ventures just bought Oak Brook Executive Plaza, a 389,000-square-foot office complex on W. 22nd St. in west suburban Oak Brook… Globe St.
   
3. New Office Conversion Planned for Goose Island Warehouse – Another developer is banking on the Goose Island tech renaissance with a new renovation of the 42,744 square foot Burhop Box & Packaging warehouse at 1071 W. Division Street to create new office space. Design and development outfit Summit Design + Build is leading the effort to transform the aging structure into an office complex, joining several other adaptive reuse projects currently underway on the man-made island… Curbed Chicago
   
4. Once Again, Office Vacancy Rate Doesn’t Budge – The national vacancy rate for the office sector remained unchanged at 16.8 percent in the third quarter. The vacancy has not budged all year, wedged at a level that is only 80 basis points below the cyclical high observed four years ago. On a year-over-year basis, vacancy has fallen just 10 basis points, with the only decline coming in the fourth quarter of 2013… NREI
5. To Sell or Refinance? In a CRE Market Flush With Capital, Owners Enjoy Luxury of Choice – One can forgive commercial property owners if they seem a bit giddy lately. Just four short years ago, their property values had been cut in half in the wake of the crippling global economic recession. No lender would return their calls and those unfortunate enough to have loans come due often lost their properties to the dreaded special servicers… CoStar Group

Tom’s Recommended Reading for the Week

Check out the top Chicago commercial real estate news before heading into the weekend!

1. Lawrence House developer lands financing, buys near Google project – Cedar Street Cos. landed financing for an ambitious Uptown redevelopment and on the other side of town bought a loft building near Google Inc.’s future offices. A venture of Chicago-based Cedar Street borrowed $18 million from PrivateBank & Trust Co. and secured a $7 million equity investment to remake the former Lawrence House, 1020 W. Lawrence Ave., said Cedar Street Managing Partner Alex Samoylovich… Crain’s Chicago
   
2. Has co-working jumped the shark in Chicago? – Cubicles are overrated. That’s the philosophy at Space, a three-month-old co-working venue in the shadow of Trump Tower. The 25,000-square-foot warehouse on the top floor of a River North loft gives off a warm industrial feel with its wood beams, open rafters and exposed-brick walls. Clean white desks and Herman Miller chairs dot the room, and about half are occupied by silently working 20- and 30-somethings. The whole setup looks more like a stylish loft than an industrial hub… Crain’s Chicago
   
3. Foreign investors pay $40.5 million for Deer Park offices – An investor group with ties to London, Dubai and Kuwait paid $40.5 million for a Deer Park office building, illustrating the Chicago-area real estate market’s increasing international connections. A venture of London-based 90 North Real Estate Partners LLP and Dubai-based Arzan Wealth Ltd. on Sept. 22 bought the seven-story Reserve at Deer Park building at 21440 W. Lake Cook Road, according to 90 North and Lake County records. Investors in the deal include Kuwait-based real estate investment and development firm Al-Tijaria… Crain’s Chicago
   
4. Heitman paying $700 million for River North office tower – Chicago-based real estate investment manager Heitman LLC has agreed to pay just over $700 million for a trophy tower in River North, in what would be one of the largest office deals in the city’s history. A Heitman fund has a preliminary deal to buy the 46-story tower at 353 N. Clark St. for nearly $600 per square foot, according to people familiar with the deal. If completed as expected, the sale of the nearly 1.2 million-square-foot tower will rank as the fourth-highest price paid for a Chicago office tower, and the second-highest per square foot… Crain’s Chicago
5. Top 10 cities with the most construction – After two years atop the Forbes list of American cities with the most construction, New York has to settle for runner-up to a booming, oil rich Houston. The Texas city racked up over $25B in construction starts in the first three quarters, with a trio of $3B gas and energy sector developments leading the charge. Two healthcare projects—the Helen L. and Martin S. Kimmel Pavilion Clinical Medical Facility at NYU and David H. Koch Ambulatory Care Center at New York-Presbyterian—topped the development list in NYC… Bisnow

Tom’s Recommended Reading for the Week

Check out the top Chicago commercial real estate news before heading into the weekend!

1. For investment returns, retail landlords lead Chicago market – It’s a good time to be a landlord in the Chicago area, especially if you own a retail property. Shopping centers around the region delivered one-year total returns of 14 percent in the third quarter, the highest among all major property types here, according to data from the National Council of Real Estate Investment Fiduciaries, a Chicago-based trade association… Crain’s Chicago
   
2. Hyatt, Polsinelli plan moves to 150 N Riverside – Hyatt Hotels Corp. and law firm Polsinelli PC are in advanced negotiations to move to a 53-story office tower under construction along the Chicago River, deals that would make the development about 60 percent pre-leased two years before it’s complete. Chicago-based Hyatt is finalizing a lease to move its headquarters to about 250,000 square feet in the building at 150 N. Riverside Plaza, according to people familiar with the project. Kansas City, Missouri-based Polsinelli also is close to shifting its Chicago office to about 110,000 square feet in the tower… Crain’s Chicago
   
3. Millenials: Not as Different as You Think – Everything you’ve been told about the millennial generation and their desires for futuristic office design isn’t true, according to a recent CBRE study. Millennials are seen by society as tech-friendly, diverse, urban-minded and married to their smartphones. In the business setting, they’re seen as anti-authority, desiring more social links and drawn to collaborative spaces. Developers and business owners, mindful that 75 percent of the workforce will be made up of millennials by 2025, have tried to follow these trends in office construction, removing private offices and making social spaces a focal workspace plan… NREI
   
4. Protein shakes maker Glanbia leasing former Sara Lee HQ space – Sports nutrition company Glanbia Performance Nutrition Inc. is bulking up its west suburban office with a deal to move into a large block of Sara Lee Corp.’s former headquarters space in Downers Grove. The subsidiary of Irish cheese and nutritional ingredients company Glanbia PLC, which makes protein drinks and other nutritional supplements under brands such as Optimum Nutrition and Isopure… Crain’s Chicago
5. It’s official: The Chicago Spire is dead – Chicago developer Related Midwest LLC has taken control of the Chicago Spire development site, putting an end to a big bubble-era dream that stalled once the housing crisis hit. Chicago bankruptcy lawyer Joseph D. Frank, who represents Spire developer Garrett Kelleher, confirmed today that his client handed over the property at 400 N. Lake Shore Drive to its biggest creditor after failing to make a required payment late last month… Crain’s Chicago

Tom’s Recommended Reading for the Week

Check out the top Chicago commercial real estate news before heading into the weekend!

1. Chicago 14th for real estate investors in survey – Real estate investors like Chicago, but it doesn’t set their hearts aflutter like Seattle, Boston and Houston. Real estate executives ranked Chicago 14th among 75 U.S. markets for investment attractiveness in 2015, according to the “Emerging Trends in Real Estate” report, an annual publication by the Urban Land Institute and PricewaterhouseCoopers LLP… Crain’s Chicago
   
2. Most precious thing in downtown Chicago? Dirt – As high-rise developers keep stamping out more apartments and condominiums, they are paying up for a key—and scarce—raw material: dirt. In Chicago’s strongest neighborhoods, prices of development sites have eclipsed precrash levels, fueled by an apartment and hotel construction wave and a resurgent condo market… Crain’s Chicago
   
3. River North development adds office space – Looking to capitalize on a tight River North office market, the developer of a retail building added an office component to its plans. Chicago-based Midwest Property Group Ltd. is seeking office or showroom tenants for 22,000 square feet in a three-story structure it plans for the corner of LaSalle and Hubbard streets. The developer previously disclosed plans for a two-story, 20,000-square-foot retail building on the site, where it has an 85-year ground lease… Crain’s Chicago
   
4. Suburbs Still Appeal to Some Office Tenants – Suburban office markets have lately received a bad rap, but some supporters say that outside markets are now the places to find the best deals and locate new satellite offices. Suburbs across the country have been struggling to recover from the recession and the flight to urban CBDs that followed… NREI
5. Venture Investors Splurge On Real Estate Tech – Investments in real estate tech are on the upswing in the wake of some billion dollar exits this year. Following Zillow’s acquisition of Trulia for $3.5 billion in July and News Corp’s $950 million purchase of Realtor.com-parent Move Inc. in September, venture investors are more eager than ever to get in on the market, putting up nearly $300 million in over 30 venture deals for real estate tech startups in the past quarter… TechCrunch

Tom’s Recommended Reading for the Week

Check out the top Chicago commercial real estate news before heading into the weekend!

1. Chicago’s Coolest Office – We asked you to show us your office over social media, and hundreds of you did, along with sending some pretty enthusiastic notes about your favorite features. What’s trending in 2014? On-site art commissions are popular, for starters. So are coffee bars stocked with specialty roasts. Other of-the-moment features: sit-stand desks, themed nooks for brainstorming, industrial lighting and the eye-popping color duo of chartreuse and electric blue… Crain’s Chicago
   
2. Foreign Investment in U.S. Markets to Top 2013 Levels – Foreign institutional investors are spending heavily on U.S. assets this year, revealed JLL’s global capital markets experts at the Urban Land Institute’s (ULI) fall meeting, currently underway at New York’s Javits Center. In fact, the inflow of foreign capital is so strong that JLL is raising its predictions on foreign investment into the United States for 2014, and is now forecasting nearly $50 billion, up from $38.7 billion in 2013. This latest prediction follows JLL’s having already raised its earlier prediction of total global direct investment transaction volumes from $650 billion to $700 billion by the close of this year… NREI
   
3. New Partners try to kick-start office project near Old St. Pat’s – Tishman Speyer Properties L.P.’s former Chicago leader and real estate investor CA Ventures LLC want to kick-start a proposed West Loop office tower. Chicago-based CA Ventures and Casey Wold, who left New York-based Tishman Speyer in February after working there nearly a decade, confirmed they are part of a recently formed venture to develop a long-planned office tower at 625 W. Adams St., near Old St. Patrick’s Church and the Kennedy Expressway… Crain’s Chicago
   
4. Law Firms Cut Back on Existing Space as They Lag Professional Services in Recovery – U.S. law firms are just not following the recovery trend experienced by the rest of the professional services industry, and are giving up occupancy in many major markets. A new report by real estate services firm Savills Studley points out that while the employment rate for the professional and business services sector is now 7.5 percent above its prior peak at the end of 2007, the number of law office employees has remained unchanged since 2009… NREI
5. Suburban Office Holds Its Own – As reported in GlobeSt.com last week, the office market in the CBD has been putting up some good numbers, showing solid improvement in its vacancy rate, level of absorption and the ability to attract investors. But the suburban region, long regarded as anemic and still losing some companies to downtown buildings, at least held its own in the third quarter, and has shown some signs of life… Globe St.

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Check out the top Chicago commercial real estate news before heading into the weekend!

1. CBRE and Bankers Life fight in court over headquarters move – CBRE Inc. is fighting in court with Bankers Life & Casualty Insurance Co., which accuses the brokerage of botching its headquarters move to the East Loop by failing to account for expenses it incurred as part of the shift. In a court filing in U.S. District Court in Chicago, Bankers Life asks a federal judge to overturn an arbitration panel’s decision to side with CBRE in the dispute. The main source of conflict is the insurer’s sublease of about 220,000 square feet at 600 W. Chicago Ave. to Groupon in 2011, space it vacated in its subsequent move to 111 E. Wacker Drive… Crain’s Chicago
   
2. Deutsche Bank paying $300 million for West Loop office tower – Amid competitive bidding for downtown Chicago office towers, a unit of Deutsche Bank A.G. has made a pre-emptive strike to buy a West Loop office tower for about $300 million. The venture of Deutsche Asset & Wealth Management forged an unusual deal for Fifth Third Center, a 35-story tower at 222 S. Riverside Plaza, before Dallas-based owner TIER REIT Inc. formally put it on the market, according to a person familiar with the deal… Crain’s Chicago
   
3. Foreign Investors Chase Yield, Saftey in U.S. Office Sector – Foreign buyers increased their investment in the U.S. commercial real estate markets in the first half of 2014, pouring in $85.4 billion in property purchases here compared to $76.7 billion in the first half of 2013. Almost half of foreign investment this year, about $37.8 billion, went into the office market, as buyers from countries including China, Russia and Canada fought over trophy properties in major markets. Sales volume was highest in New York City, at $9.4 billion, with $4.6 billion in sales in Los Angeles and just more than $3 billion each in Boston and Washington D.C., according to a recent report by real estate services firm Avison Young… NREI
   
4. Golub ventures buying two suburban office properties – Ventures of Golub & Co. have deals to buy two office properties in the Chicago suburbs, an area some investors are scouring for higher returns than they can find downtown. Chicago-based Golub and Boston-based private-equity firm Alcion Ventures L.P. have agreed to pay about $57 million, or $150 per square foot, for the four-building Oak Brook Executive Plaza, according to real estate sources. Meanwhile, a venture of Golub and a Middle Eastern fund manager have a deal to buy the 11-story International Tower near O’Hare International Airport, sources said. That price could not be determined… Crain’s Chicago
5. Space Shift: As Wealthiest Flock to Supertall Condos, Offices Go Horizontal – In Midtown Manhattan, the extra-slim 432 Park Ave. condo tower is scheduled Tuesday to reach its peak 1,396-foot height and become the tallest residential building in the western hemisphere, 146-feet taller than the roof of the Empire State Building. But the crowning of the 104-unit tower—which hosts a $95 million penthouse—marks more than just the latest of the super-tall condos for the ultra-rich… Wall Street Journal

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Check out the top Chicago commercial real estate news before heading into the weekend!

1. Chicago’s real estate market is booming –  In 2017, for the first time in eight years, Chicago will see tenants move into two brand-new office buildings. The launches of these towers – located next to each other on a picturesque bend in the Chicago River – are seen as a major sign of economic recovery in the third-largest US city, of the resurgence of Chicago’s downtown area, and of the changing tastes of young workers across America. Their delivery in three years will, according to local developers, be the first in a string of new buildings welcoming tenants, as the Windy City’s commercial property market rebounds from the recession… Financial Times 
   
2. Investors Snap Up Apts., Office Properties to Fuel Third Quarter Sales Volume – With vast amounts of investor capital allocated to chase after all types of commercial real estate, especially multifamily and office assets, sales of U.S. commercial property are projected to total about $415.1 billion for the four-quarter period ending with the third quarter of 2014. That represents an increase of about 8% over the previous four-quarter period, according to early CoStar COMPs sales transaction data… CoStar Group
   
3. Old Post Office owner plots next move after breakup with Sterling Bay – The owner of the vacant Old Main Post Office may seek a sale of the sprawling West Loop property or a new development partner after a joint venture with Sterling Bay Cos. fizzled. Less than four months ago, British developer Bill Davies and Chicago-based Sterling Bay said they were forming a venture for a $500 million redevelopment of the 2.7 million-square-foot building that straddles Congress Parkway.The news brought hope that the property, empty since the post office close 18 years ago, finally would be transformed into a new use… Crain’s Chicago
   
4. Sterling Bay puts West Loop building up for sale – A 101-year-old West Loop office building that has become one of the most desirable addresses in Chicago’s growing technology sector is for sale and could fetch $300 million or more. Sterling Bay Cos. hired Jones Lang LaSalle Inc. Managing Director Bruce Miller to seek a sale of the 16-story vintage building at 111 N. Canal St., Sterling Bay Managing Principal Andy Gloor confirmed. He declined to comment further… Crain’s Chicago
   
5. Suburban Chicago office vacancy drops again, but market feels slow – For the first time since 2011 the office vacancy rate for suburban Chicago dropped for two quarters in a row, providing rare momentum in a long-stagnant market. Overall vacancy fell to 23.4 percent in the third quarter, down from 23.7 percent in the second quarter and 24.2 percent a year earlier, according to Chicago-based Jones Lang LaSalle Inc. The vacancy rate hasn’t been that low since fourth-quarter 2008… Crain’s Chicago

Tom’s Recommended Reading for the Week

Check out the top Chicago commercial real estate news before heading into the weekend!

1. Transportation Drives CRE Development – Cushman & Wakefield has released a new report that explores the consequences of rapid population growth in 10 major North American cities. Entitled “Urban Development: Faster Greener Commutes Key to Sustained City Growth,” the report discusses the impact of intensified gridlock and slow commutes that impact work productivity and quality of life, along with the transit-oriented real estate developments helping to relieve congestion and support growth… Globe St.
   
2. Cision signs lease in Prudential Plaza in Chicago’s East Loop – The owners of Prudential Plaza landed their first big tenant since taking over the East Loop office complex last year, the first deal of many they will need to turn the property around. Swedish public relations software provider Cision AB leased 49,464 square feet at One Prudential Plaza, which will become the firm’s headquarters after it merges with rival firm Vocus Inc. Stockholm-based Cision will move about 400 Chicago workers to the seventh floor of the 41-story tower at 130 E. Randolph St. in the first quarter of 2015, moving from a nearby building, a Vocus spokeswoman said… Crain’s Chicago
   
3. Downtown Chicago office vacancy rate falls – As more companies move their offices, the downtown office vacancy rate keeps moving lower. The overall downtown Chicago vacancy rate fell to 13.8 percent in the third quarter, its lowest point in 5½ years, according to Los Angeles-based CBRE Inc. Vacancy fell from 14.1 percent in the second quarter, which already was a five-year low, and from 14.7 percent a year earlier… Crain’s Chicago
   
4. Office Investors Decide It’s Time to Buy Vacancy – An economy producing a steady stream of new jobs, combined with a dwindling supply of affordable core office properties, has reversed investor sentiment for office properties that were largely discredited and ignored by investors as recently as one year ago… CoStar Group
   
5. Urban Locations Are Most Desirable for New HQs – Developers are trying two distinct approaches to attracting new office tenants in a market that is rapidly seeing cheap, big-block space dry up: the tried-and-true new class-A headquarters building and repositioning a dated property. Office vacancy rates declined again in most major U.S. markets during the third quarter 2014, and asking rates are increasing as tenants’ appetite for space continues to grow, according to a report this week from CBRE… NREI

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Check out the top Chicago commercial real estate news before heading into the weekend!

1. Developers jockey for anchor tenants to fill Chicago office towers – How many major office towers will join Chicago’s skyline over the rest of this decade could be decided soon by just three big tenants. When developer John O’Donnell recently secured a $296 million construction loan, it meant he’ll be able to complete his long-planned 53-story tower on the Chicago River, only the second big office development started downtown since the previous development cycle fell victim to the recession… Crain’s Chicago
   
2. How different are Millennials than the rest of us? – Just how different are Millennials, Gen Xers and Baby Boomers when it comes to how they want to work? Which of these groups prefer working from home? Which thrive in a traditional office environment? Coldwell Banker Commercial Affiliates looked at these questions in its recent survey of more than 2,000 adults… RE Journals
   
3. Playing field tilts toward landlords – As the US economy and overall office market continue to improve, more cities have approached the tipping point between a landlord’s market and a tenant’s market, according to CBRE’s latest quarterly OccupierView report, which analyzes the nation’s office markets from the tenant perspective. Tenants in most downtown markets have begun to experience tightening conditions that have curtailed availability and boosted costs, the report finds, though suburban office markets have experienced little change… Globe St.
   
4. Sterling Bay venture paying $28 million for River North loft – Chicago developer Sterling Bay Cos. and a partner are paying almost $28 million for a River North loft office building that wound up in foreclosure after the crash, nearly double its 2004 price. A joint venture between New York-based DRA Advisors LLC and Sterling Bay, one of the city’s most active developers and acquirers of non-traditional office space, agreed to buy the seven-story building at 213 W. Institute Place for about $185 per square foot, which would be about $27.5 million, according to people familiar with the transaction… Crain’s Chicago
   
5.  TPG Group to acquire Cassidy Turley, rebrand as DTZ – Confirming rumors and reports that have been floating around the industry for several weeks, a group led by private-equity giant TPG Capital has agreed to acquire U.S.-based Cassidy Turley and combine it with its previously acquisition target DTZ to form what could become the world’s third-largest CRE services company… CoStar Group

Tom’s Recommended Reading for the Week

Check out the top news in Chicago commercial real estate before heading into the weekend!

1. It’s the hottest commercial property market since 2007 – Sales of Chicago-area commercial properties are on pace for their best year since the crash amid an improving economy and low interest rates. Investors acquired more than $9.15 billion in local apartments, hotels, retail, office and industrial properties through August, up 28 percent from the $7.14 billion spent through the first eight months of last year, according to New York-based Real Capital Analytics Inc… Crain’s Chicago
   
2. HFF Closes $62M Sub. Office Sale – Although the suburbs suffer from an elevated vacancy rate and continue to see some of its office tenants move into Chicago’s CBD, many top properties seem immune to these troubles and remain very attractive to investors. HFF recently closed, for example, the $62 million sale of Highland Landmark II, a 284,278-square-foot class A office building in the western suburb of Downers Grove. HFF marketed the property on behalf of GLL Real Estate Partners. James Campbell Company LLC, which was advised by Colony Realty Partners, purchased the building… Globe St.
   
3. Rise Interactive expanding at 1 S Wacker – Rise Interactive Inc. plans to hire as many as 150 employees and double the size of its West Loop headquarters as it prepares for torrid growth in its digital marketing business. Rise said it agreed to expand its space at 1 S. Wacker Drive to about 34,000 square feet in a new 12-year lease, from its current 15,000 square feet… Crain’s Chicago
   
4. West Loop site could fetch $35 million – A West Loop site where Steve Fifield envisioned a 75-story skyscraper is up for sale, possibly ending the Chicago developer’s ambitious plan for the property. CBRE Global Investors, Mr. Fifield’s financial partner in his planned development at 601-625 W. Monroe St., hired CBRE Inc. to sell the 60,000-square-foot property, which could fetch as much as $35 million, according to people familiar with the property… Crain’s Chicago
   
5.  Uber accelerates Chicago growth with new West Loop lease – Rideshare firm Uber Technologies Inc. is stepping on the gas in Chicago, adding a large chunk of office space in the West Loop to make room for potentially hundreds of new employees. Just months after moving its Midwest headquarters into a much smaller building… Crain’s Chicago

CHICAGO, IL – As commercial real estate needs have become more complex and specific to each client, Bradford Allen has begun offering project management services to ensure each client’s transaction goes seamlessly, saving them time and money, and ensuring the environment will be a good fit.

Project management has become an important part of commercial real estate for a variety of reasons, including growing technology demands, planned stages of growth, and greater specialized services. The scope of project management from beginning to end includes: project planning and design oversight; strategic planning; budget and schedule development; occupancy planning; risk management; site selection analysis; construction management, and move management.

 “It’s site selection, it’s looking at your needs now and in the long term, it’s the pricing and selection of furniture, ensuring the IT infrastructure, the moving and much more,’’ said Steven Lerner, a one-time corporate real estate manager turned broker  whom Bradford Allen brought in to start its project management practice. “Essentially, our focus is on customization so the space is tailored to the exact needs of the client.’’

Lerner notes some of the reasons project management is critical:

• An end-to-end solution — From the planning stage to the day you get the keys, a project manager will maximize the potential of your new space and assure it comes in at or under budget. Hiring one at the very start is most beneficial, but a project manager will add value at any time in the process.
• Efficiency and accountability — The goal of a project manager is to save the client 10% to 20% of the total cost and reduce the commitment of their internal resources. This positive return on investment comes from timely coordination and the savings that come from experience and existing vendor relationships.
• Single point of contact — Managing a variety of vendors and specialized tasks requires more time, expertise and focus that most people realize. The project manager will keep everything from the drywall to the telephone installation on a tight and orderly schedule while your employees excel at your core business.
• Professional expertise — Real estate project managers have the expertise to consult on a client’s individual needs. Perhaps a company is experienced planned stage growth and needs an office that can be expanded in a year. The project manager can plan ahead for how your space will look now, a year from now, and five years from now.
• Risk management — People think about the cost of hiring a project manager, but what is the potential cost of not hiring one? The very real potential for disruption in your business due to building or permitting delays is likely to far exceed the cost of ensuring your project is done on time and meets your needs.

Lerner has consulted for Bradford Allen clients that include small firms lacking the resources to even begin seeking input on sophisticated IT infrastructure and space management issues, large companies with a firm budget and strict timeline, businesses not yet present in the Chicago market, and even for projects outside of Chicago.

“We would have spent a lot more time and money if there were no project manager overseeing the project, said Biren Jethwa, a recent Bradford Allen client who says project management work was critical for the office space it recently rented at 55 E. Monroe. “It was exceptionally helpful on the IT front. You will have cost overruns if you don’t hire one.”

About Bradford Allen Realty Services

Bradford Allen Realty Services, a Chicago-based commercial real estate firm, offers a full range of services and expertise to entrepreneurial and corporate business entities as well as not-for-profit organizations. The firm provides real estate strategy, advice, marketing, and transaction execution for occupiers, investors and owners of real estate. For more information please visit our website at www.bradfordallen.com.

Tom’s Recommended Reading for the Week

Check out the top news in Chicago commercial real estate before heading into the weekend!

1. CRE Execs Feeling “Bullish” on US – DLA Piper just released its “State of the Market Survey” at its 12th Global Real Estate Summit in Chicago this week, and of the commercial real estate executives surveyed, 89% were “bullish” on the prospects for the US economy. This was slightly higher than last year, when 85% responded optimistically, and even higher than in 2007, when 77% did so… Globe St.
   
2. For sale: Another $1.8 billion of office towers – More downtown office landlords are hanging up For Sale signs, an end-of-summer tradition getting an extra boost this year from an unusually strong investment sales market in Chicago.Five more buildings with an estimated combined value of about $1.8 billion are going on the market, according to people familiar with the properties… Crain’s Chicago
   
3. Is this the start of office building boom in the Loop? – Nothing shapes perceptions of a city like its skyline, and nothing defines a skyline like towering office buildings. Successive waves of office construction over the past 30 years added striking new features to Chicago’s profile, showcasing a vibrant commercial hub… Crain’s Chicago
   
4. Tech Turns Chicago Skid Row Into Top Market – Chicago’s River North, a district once notorious for its prostitutes and dilapidated warehouses, has become one of the hottest office markets in the U.S. The neighborhood has transformed from a wasteland in the 1970s to a trendy spot for living, dining and entertainment that’s also attracting technology tenants… Bloomberg
   
5. West Loop Gets Another Tech Firm – The West Loop has become the CBD’s hottest office market and one of the reasons is the desire of many tech firms to find a downtown home. And Newark element14, an electronics and engineering firm, is just the latest tech company to make this move after spending the last 34 years in Ravenswood on the North Side… Globe St.

Tom’s Recommended Reading for the Week

Check out the top news in Chicago commercial real estate before heading into the weekend!

1. 11 Historic Buildings Getting New Life as Hotels & Apartments – Chicago’s strong architectural legacy lives on not only in our minds and in history books, but also in the dozens of historic buildings all around the city whose age and pedigree make them too important to get rid of, but too outdated to still serve their original purpose. Buildings meant to be offices a century ago no longer meet the needs of office tenants today, so in order to avoid money-wasting vacancy or tragic dilapidation, these buildings need to find new uses. Fortunately, the rebounding economy is seeing a lot of interest in rescuing these historic buildings by changing their use from offices to something new… Curbed Chicago
   
2. Citizens Financial Co-Finances $296M for West Loop Tower – Citizens Financial Group recently helped complete a $296 million construction loan to finance the development of 150 N. Riverside, one of several new office towers beginning to rise along the Chicago River in the West Loop. The O’Donnell Investment Co. began construction on the 53-story, 1.2-million-square-foot building in July and the loan closed in August, Citizens’ officials tell GlobeSt.com. The bank was the joint lead arranger and joint bookrunner along with Bank of America and Helaba… Globe St.
   
3. Hearn poised for big gain in $241 million Loop office sale – After buying a 40-story Loop office tower three years ago and filling up most of its empty space, Hearn Co. is selling out for a big profit. The Chicago-based office investor agreed to sell the Helmut Jahn-designed tower at 55 W. Monroe St. for about $300 per square foot, or $241 million, to John Hancock Real Estate, according to people familiar with the deal… Crain’s Chicago
   
4. South Street Capital plans office project on Chicago’s Goose Island – A Chicago real estate investor is doubling down on its bet that Goose Island will emerge as an office market, planning a $90 million project accessible by a new cycling and pedestrian bridge over the Chicago River. A venture of South Street Capital paid almost $8.25 million Aug. 28 for the Goose Island Boat Yard, a three-acre property along the Chicago River where it plans to build a six-story, 350,000-square-foot office building, said South Street Co-founder Matt Garrison… Crain’s Chicago
   
5. What Corporations Can Coopt from Co-Working  – Companies seeking to attract top, young talent—and who isn’t?—by creating dynamic work environments should look not only at the non-traditional spaces seen in large tech companies, but also at smaller incubators offering co-working spaces. Co-working originated within the corporate environment in the early 2000s to support “co-opetition”—collaborations and even partnerships between competitors with synergistic strengths (think of Microsoft and Cisco)… NREI

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Check out the top news in Chicago commercial real estate before heading into the weekend!

1. Can a new broker fill Trump’s long-vacant retail space – Donald Trump’s controversial decision to splash his name on his River North skyscraper drew lots of national media attention over the summer. Now the outspoken developer will test whether tenants took notice. New York-based Trump Organization hired retail brokerage RKF to find office tenants to fill the lower two levels of the long-vacant four-level shopping area at the base of the Trump International Hotel & Tower at 401 N. Wabash Ave… Crain’s Chicago
   
2. Dom & Tom Expands in Chicago with Plans to Increase Presence in the City – In an ongoing effort to increase its presence in Chicago, digital development agency, Dom & Tom Inc. announced today that the company is doubling its office space in the Tribune Tower and adding several new web & mobile developers, UX/UI specialists, visual designers, and digital strategists to their staff. Cofounder and CEO, Tom Tancredi, has relocated to the Chicago office from New York City, where the company was founded five years ago, to focus on the company’s continued expansion… World Business Chicago 
   
3. Healthcare No Longer a Niche Market – Harrison Street Real Estate Capital just pulled off the biggest healthcare deal of the year, and Mindy Berman, the managing director of JLL, which brokered the 12-asset, $283 million sale, tells GlobeSt.com that the offering generated greater interest from investors than normally seen, partly due to the growing importance of medical office in general, and partly due to the way the Chicago-based Harrison carefully constructed this specific portfolio. The investors who bought the properties were not disclosed… Globe St.
   
4. Innovation-focused Morgan Manufacturing to open in Fulton Market – A revamped industrial complex in the Fulton Market district will give large corporations another urban space to connect with up-and-coming Chicago companies. Morgan Manufacturing, an 88,000-square-foot event, meeting and work facility slated to open by late September, will provide space for organizations such as the Chicago Innovation Awards to bring potential partners together, the company announced Monday… Chicago Tribune
   
5. What Your Workplace Says About Your Company Culture – The world’s highest-performing and most innovative companies create physical workspaces that support business goals and culture, foster innovation and collaboration and promote employee retention. The saying that “every picture tells a story” is supported by the fact that office spaces of today often reveal more about companies’ cultures than the “About Us” sections of their websites… NREI

Tom’s Recommended Reading for the Week

Check out the top news in Chicago commercial real estate before heading into the weekend!

1. Chicago a top city for fastest-growing companies, Inc ranking says – Chicago is a top city on Inc.’s annual ranking of America’s fastest-growing private companies, the magazine said today. The Inc. 5000 ranking for 2014 analyzes companies’ three-year revenue growth and lists the 5,000 fastest-growing private companies and small businesses in the U.S. Chicago has 95 companies on the list — the most of any city except New York. San Francisco came in at No. 7, with 63 companies… Crain’s Chicago
   
2. Global Investors Target Secondary Markets – Foreign investors have long flocked to the top gateway markets like New York, San Francisco, and Washington, DC, but increasingly these individuals and institutions are poking around secondary markets throughout the US, a reflection both of the American economy’s strength and the transparency provided by the country’s real estate laws… Globe St. 
   
3. Why real estate investors just can’t quit Chicago – The possibility of substantial tax increases to pay for the city’s and state’s unfunded pension obligations hasn’t prevented real estate investors from plunking down big sums—even record-breaking ones—to snap up property in the area.“I think it’s an issue, but I don’t think it’s stopping anyone from investing in Chicago… Crain’s Chicago
   
4. Selling points: Why now is a good time to sell – The recent sale of 200 W. Monroe, a 23-story office tower located in The Loop in downtown Chicago, drives home a point that has become increasingly evident in recent months: Today’s real estate market is a great one for sellers. And, like any good sellers’ market, it is not a bad market for buyers, either… RE Journals 
   
5. U.S. Construction Shifts Into Second Tier – Construction projects in cities across the country that stalled during the economic downturn now are getting the green light, an indication that the real-estate recovery is spreading beyond a handful of urban areas. The construction of office buildings, hotels and apartment buildings picked up in New York, San Francisco and Boston several years ago. Now activity is spreading to Atlanta, Chicago, Las Vegas and a number of other cities that are finally seeing a pickup in employment, economists say… Wall Street Journal 

Tom’s Recommended Reading for the Week

Check out the top news in Chicago commercial real estate before heading into the weekend!

1. Amid rising market, pile of bad real estate debt shrinks further – Special servicers — firms that get paid to work out bad real estate debt — have a lot more free time these days. The delinquency rate on Chicago-area commercial mortgage-backed securities (CMBS) loans dipped below 5 percent in May and has stayed there, its lowest point since January 2010, according to Trepp LLC, a New York-based research firm. The rate was 4.9 percent in July, down from 7 percent a year earlier and a peak of 10.6 percent in January 2013… Crain’s Chicago
   
2. After legal fight, Des Plaines office building sells for huge discount – A Chicago investor bought a nearly half-empty foreclosed office building near O’Hare International Airport for $6.2 million, less than a third of what the lender was owed on it. The sale of the 244,049-square-foot building at 1350 E. Touhy Ave. ends a troubled chapter that began in December 2009, when the property’s developer, Des Plaines-based MR Properties LLC, filed for Chapter 11 bankruptcy protection... Crain’s Chicago
   
3. Serial converter has no such plans for latest Loop office tower buy – Prices of the area’s biggest commercial properties keep rising, and so do their taxes. Property taxes rose at nine out of the 10 commercial properties in Cook County with the highest bills in 2013, according to the Cook County Treasurer’s Office. That’s similar to the 2012 tax year, when tax bills also mostly rose for the area’s biggest landlords. Yet unlike 2012, when five of the most valuable commercial properties here were hit with double-digit tax increases, increases in the past year were more modest, perhaps reflecting a cooling real estate market that was red-hot throughout 2012 and into 2013… Crain’s Chicago
   
4. Office space, the final frontier – When Montgomery Ward & Co. opened its massive Catalog House along the Chicago River in 1908, it was at the cutting edge of commerce, with “pickers” on roller skates zipping through the halls to gather merchandise ordered from the retailer’s catalogs.
   More than a century later, the behemoth at 600 W. Chicago Ave. is once again a pathbreaking address in Chicago commerce. Every day, hundreds of employees bicycle to work at Groupon Inc., where they sell all manner of products and services via the Internet. It’s just one sign of how the city’s burgeoning tech sector is radically transforming the largest downtown office market west of Manhattan… Crain’s Chicago
   
5. Zell Tackles Overhaul at Equity Commonwealth: Real Estate – Since taking over Equity Commonwealth in an investor-led revolt almost three months ago, Sam Zell and his team have found buyers for more than $200 million of properties, sold shares in a former unit and moved the company’s headquarters. Now they face a bigger challenge. Zell and one of his longtime deputies, David Helfand, must remake the Chicago-based office landlord after an ouster of top executives based on claims of mismanagement and a misdirected strategy. They’re in charge of a disparate group of more than 100 properties in U.S. suburbs and markets where rent growth is slower than in big cities such as… Bloomberg 

Tom’s Recommended Reading for the Week

Check out the top news in Chicago commercial real estate before heading into the weekend!

1. Adventus buys Chicago-area office property near O’Hare – A Canadian real estate investment trust with a voracious appetite for office properties in the Chicago suburbs has zeroed in its largest deal yet, agreeing to pay just over $95 million for a complex near O’Hare International Airport. Vancouver, British Columbia-based Adventus Realty Trust has a preliminary deal to buy the three-building Columbia Centre complex in Rosemont for a little more than $95 million, or $154 per square foot, according to people familiar with the deal… Crain’s Chicago
   
2. Morgan/Harbour Construction completes HQ’s for Hub Group – Morgan / Harbour Construction has completed the new ground-up 130,000 square foot, four-story office build-to-suit for the Hub Group (NASDAQ: HUBG) at 2000 Clearwater Drive in Oak Brook, Illinois. The build-to-suit office project represents the first new office building in Oak Brook since 2000. A leading asset-light freight transportation management company providing comprehensive intermodal, truck brokerage and logistics services, Hub Group relocated its headquarters and nearly 500 employees from its previous locations in Illinois... RE Journals 
   
3. Property taxes up at biggest buildings in Cook County – Prices of the area’s biggest commercial properties keep rising, and so do their taxes. Property taxes rose at nine out of the 10 commercial properties in Cook County with the highest bills in 2013, according to the Cook County Treasurer’s Office. That’s similar to the 2012 tax year, when tax bills also mostly rose for the area’s biggest landlords. Yet unlike 2012, when five of the most valuable commercial properties here were hit with double-digit tax increases, increases in the past year were more modest, perhaps reflecting a cooling real estate market that was red-hot throughout 2012 and into 2013… Crain’s Chicago
   
4. Virtual Marketing Helps Brokers Showcase Properties – There has been a lot of buzz about the use of drones to capture aerial photos and a bird’s eye view of properties. Yet drones are just one of the high-tech tools that brokers use these days to market real estate assets for sale or lease. Although the Federal Aviation Administration (FAA) has taken steps to crack down on drones, the use of such unmanned aerial vehicles to shoot photos has become increasingly popular among both commercial brokers and residential realtors… NREI 
   
5. Before IPO, Enova picks future Chicago HQ – As it gets ready to be spun off into its own publicly traded company, online payday lender Enova International Inc. found a new Chicago headquarters. Enova signed a 12-year lease for 160,240 square feet in the 23-story office tower at 175 W. Jackson Blvd., where it will move early next year, the company confirmed… Crain’s Chicago

Tom’s Recommended Reading for the Week

Check out the top news in Chicago commercial real estate before heading into the weekend!

1. Construction deals rise in first half – The local construction industry got off to a strong start during the first half of the year but will likely be challenged to continue such a pace as 2014 wears on. Signed contracts for commercial and residential construction projects in the Chicago area hit nearly $4.3 billion during the first six months of the year, up 16 percent versus $3.7 billion in deals during the same period a year ago, according to data from New York-based McGraw-Hill Construction… Crain’s Chicago
   
2. BECO buys Motorola Mobility’s Libertyville campus – The vacant former Motorola Mobility campus headquarters in Libertyville has been acquired by a Washington, D.C.-based commercial real estate company that plans to remake the space into an “innovation campus.” BECO Management Inc. said Monday it purchased the five-building, 1.2-million-square-foot complex on 84 acres of land for $9.5 million… Chicago Tribune
   
3. Is something wrong with Chicago’s suburbs? – In the past, I’ve written about Connecticut becoming a suburban corporate wasteland as well as the rise of the executive headquarters in major global city downtowns. What we see is anecdotal signs of re-centralizing, while the more bread-and-butter — though still often well-paying — jobs are heading to less-expensive suburban locales in places like Austin, Texas; Charlotte, North Carolina; and Salt Lake City. This leaves expensive and business-hostile suburbs around global cities, like most of those in Connecticut, in a tough spot… Crain’s Chicago
   
4. Wintrust sings lease for 231 S. LaSalle – Wintrust Financial Corporation has entered into a long term lease for the main banking hall, multiple floors, retail space and primary signage to the iconic 231 South LaSalle building. Built in 1924, the building is located at the base of “the canyon” on the corner of LaSalle and Jackson, across from the Federal Reserve Bank and the Chicago Board of Trade. Once the home of Continental Illinois Bank, the building is considered one of the most recognizable buildings in the Loop and features a banking hall believed to be one of the largest of its kind in the world… RE Journals
   
5. Sterling Bay to buy LaSalle-Wacker Building – Sterling Bay Cos. has found its next target: an 85-year-old riverfront office tower on Wacker Drive. A venture of the Chicago-based developer agreed to pay $53 million for most of the 41-story art deco tower at 221 N. LaSalle St., known as the LaSalle-Wacker Building, according to a person familiar with the deal. The acquisition marks another turnaround opportunity for Sterling Bay, which is converting the former Fulton Market Cold Storage building into Google Inc.’s future Chicago office and is trying its hand at the long-vacant, 2.7 million-square-foot Old Main Post Office straddling the Congress Parkway… Crain’s Chicago

Tom’s Recommended Reading for the Week

Check out the top news in Chicago commercial real estate before heading into the weekend!

1. GoHealth subleases River North building near HQ – In the latest real estate deal involving a fast-growing technology company, GoHealth LLC added space in River North in a building that backs up to its headquarters. GoHealth subleased a three-story, 42,000-square-foot loft building at 219 W. Superior St., said CBRE Inc., which represented the health care tech firm in the transaction. GoHealth accomplished a difficult feat in finding a larger block of space in River North, the city’s tightest office market. The area has 10.8 percent vacancy, well below 14.1 percent for all of downtown, according to Los Angeles-based CBRE… Crain’s Chicago
   
2. Sale clears obstacle for potential Wacker Drive tower – At five stories, the headquarters of General Growth Properties Inc. is a stump in the forest of office towers that stand tall on Wacker Drive. But the building’s owner has moved a step closer to replacing the stubby structure with a high-rise of its own. A venture of Howard Hughes Corp. paid $12.3 million for the 43,000-square-foot parcel beneath the building at 110 N. Wacker Drive, according to Cook County property records. Dallas-based Howard Hughes has said it wants to redevelop the property, a more attainable goal now that it owns both the building and land underneath it… Crain’s Chicago
   
3. The New Business Casual Is Still Uptight – Every workplace imposes certain behavioral standards on its workers — dress this way, talk that way, get lunch here and not there. Learning these standards is, we’re told, a big part of being successful. But what do we do if they’re constantly shifting, or if we’re not even sure what they are? At The Billfold, Megan Reynolds tackles one aspect of this question — the meaning of the word “professional.” As she notes, many of us have certain received ideas about what counts as professional — she mentions “pants that are not jeans” and “org charts… The New York Times 
   
4. With two LaSalle Street hotels already, Reschke comes back for thirds – After developing one hotel on LaSalle Street and starting another last year, Michael Reschke is laying plans for No. 3, the latest in a wave of new hotels planned for the city’s financial district. The Chicago developer plans to convert part of a vintage office building at 208 S. LaSalle St. into hotel rooms, according to an operating agreement for the property filed this month with the Cook County Recorder… Crain’s Chicago
   
5. Workspace Variety’s the Key – A mix of workspace options is essential improving worker productivity, CBRE Group suggests in a new report. Titled “The Evolving Workplace: How US Office Space is Changing,” the study suggests a direction for the future of office-using tenants. “Organizations that provide flexibility and choice will create greater office efficiencies and higher levels of employee satisfaction,” the report states. “By more intensely utilizing their assets, they are able to reinvest in technology and a suite of services that can make the new workplace environment a reality for their workforce… Globe St.

Tom’s Recommended Reading for the Week

Check out the top news in Chicago commercial real estate before heading into the weekend!

1. CBRE acquires Chicago’s U.S. Equities – Chicago boutique brokerage U.S. Equities Realty LLC has been acquired by CBRE Inc., the world’s largest commercial real estate firm, following months of rumors of a deal swirling in local real estate circles. Los Angeles-based CBRE today completed the deal for the U.S. business of the firm that was founded in 1978, the companies said. Terms of the deal were not disclosed. The deal does not include U.S. Equities’ Latin American business… Crain’s Chicago
   
2. Chicago slowly, but steadily, increasing construction activity – Although not as strong as the robust economic recoveries experienced in Texas and along the West Coast, Mathew R. Dougherty, P.E., executive vice president and regional manager –Midwest at McShane Construction Company, says Chicago and the Midwest Region has experienced a slow, but steady increase in construction activity over the past 12 months. “Most notably, two large market sectors, industrial and multi-family, comprise the majority of new construction activity,” he said. “Within the industrial market, there has been a shift over the past 18 months in supply and demand… RE Journals
   
3. Uncle Sam wants ideas for State Street buildings – The federal government is trying to figure out what to do with a stretch of State Street that’s not so great. The U.S. General Services Administration is seeking ideas for four vacant and vintage buildings it owns on the 200 block of South State Street, the beginning of a process that could lead to an opportunity for developers to revitalize a key Loop block that progress left behind. The GSA, which runs the Everett M. Dirksen Federal Office Building & Courthouse behind the buildings, took them over nearly a decade ago, thinking it might need the properties for a new office building… Crain’s Chicago
   
4. Publisher books suburbs’ second-largest office lease of 2014 – Textbook publisher Houghton Mifflin Harcourt Co. leased 106,000 square feet in Itasca, the second-largest office lease this year in the Chicago suburbs. The Boston-based publisher and educational content producer signed a 12-year deal at 1 Pierce Place in the west suburb and plans to move 340 employees there from Rolling Meadows in October 2015, a company spokeswoman said. The employees, who work in product development, research, sales, marketing and customer service, will move from 110,000 square feet Houghton Mifflin leases in the Atrium Corporate Center, 3800 Golf Road in Rolling Meadows, the spokeswoman said… Crain’s Chicago
   
5. Sterling Bay Expanding Into Midwest – As reported yesterday in GlobeSt.com, Sterling Bay Companies just entered into a partnership with New York-based J.P. Morgan Asset Management that makes the latter a co-developer of the many Near West Side buildings Sterling has bought since 2012. And today Sterling principal John Gavin tells GlobeSt.com that such a partnership was essential. Renovating the more than 20 assets, which includes the giant Fulton Market Cold Storage building at 1000 W. Fulton and Fulton West, a portfolio of existing and partially completed office, retail and parking facilities, would run up about $750 million in project costs, far beyond Sterling’s capacity if it were to go it alone… Globe St.

The technology scene is witnessing tremendous growth. According to Built in Chicago, funding to Chicago start-ups has increased 169% from 2012 to 2013. This additional funding has the best of the best go from fledging idea to growing company in no time. With the growth, operational challenges start to multiply as well. Perhaps the biggest of these challenges involves real estate, which is one of the largest line items on a company’s balance sheet.

In a recovering economy where office space is getting tighter, the challenges are heightened. The right space at the right price can foster a culture to help you attract the talent necessary for success. The wrong location or a lease under dubious terms could undermine the very viability of a business.

Major company relocations from the suburbs to downtown by Motorola Mobility and Gogo, as well as expansions by kCura, Fieldglass, Vivid Seats and Punchkick Interactive illustrate that the pendulum is beginning to swing in favor of the landlords, especially in the River North submarke

The competitive office conditions may be particularly acute for smaller, entrepreneurial companies that often focus narrowly on the brick and timber loft buildings common in River North. With a total inventory of just over 17 million square feet, the River North submarket continues to record positive net absorption, which helped keep the vacancy rate at only 9.4% at the end of the first quarter

While landing the right space is tough, here are a few considerations that can help companies stay nimble and successfully navigate through the commercial office space market in downtown Chicago…

Read Full Report

Tom’s Recommended Reading for the Week

Check out the top news in Chicago commercial real estate before heading into the weekend!

1. KBS Closes $850 Sale of 300 N LaSalle – Officials from KBS Real Estate Investment Trust II said yesterday that they had closed on the sale, first announced in May, of the 300 N. LaSalle building to the Newport Beach, CA-based Irvine Company for $850 million, the most ever paid for a Chicago office building. The deal was also the third-largest office building transaction in the US this year, according to CoStar. KBS paid $655 million for the 60-story, 1.3-million-square-foot tower on the Chicago River back in 2010… Globe St.
   
2. LaSalle Investment Management to buy 101 N Wacker – LaSalle Investment Management has agreed to pay $210 million for a 24-story office tower on Wacker Drive, another sign of the frothy downtown office sales market.The deal for 101 N. Wacker Drive continues the flow of foreign money into downtown office properties, including recent acquisitions by Japanese and Chinese ventures. LaSalle is buying the building from Hines Interests L.P. on behalf of German investors, according to people familiar with the transaction… Crain’s Chicago
   
3. More New York Companies Experiment With Innovative Office Space – Alexander Saint-Amand admits he used his old desk to store his stuff: extra neckties, books and water bottles. As of last week, that became impossible because Mr. Saint-Amand no longer has a permanent desk at Gerson Lehrman Group Inc., the company he leads as chief executive. Like everyone else in the 250-person office, Mr. Saint-Amand is now assigned only a laptop, a headset and a locker. GLG’s new office design offers an array of workspaces—from comfortable couches to high stools at a barista-staffed coffee bar to single-occupancy glass booths… Wall Street Journal
   
4. Office Lags Outside Energy, Tech Markets – For office markets with strong concentrations of energy or tech tenants, the recovery in demand has been equally strong. Outside of those markets, however, it’s considerably less robust, Albert Lindeman, SVP with Sperry Van Ness, tells GlobeSt.com. “The coasts are doing very well,” says Lindeman, citing New York City and San Francisco. “When you get into the energy sector, Denver and the Texas markets are growing dramatically.” In secondary markets such as Charlotte as well as Lindeman’s home base of Chicago, the expansion of tech tenants is contributing to growth… Globe St.
   
5. Sterling Bay Companies and IPDNA Companies to revamp Chicago’s historic old Main Post Office – The rumors have been put to rest about Chicago’s old Main Post Office building. Officials from Sterling Bay Companies came forth recently announcing a partnership with Chair of International Property Developers North America (IPDNA), owner Bill Davies, to redevelop the property. Andy Gloor, managing principal of Sterling, told Illinois Real Estate Journal, that IPDNA has done an enormous amount of due diligence on the property in the last five years… RE Journals

Tom’s Recommended Reading for the Week

Check out the top news in Chicago commercial real estate before heading into the weekend!

1. DRW scraps plan for 17-story hotel on Fulton Market – Trader Don Wilson filed plans with the city for a Brooklyn Bowl bowling alley and nightclub on West Fulton Market, with one major omission: a 17-story hotel. The development arm of Mr. Wilson’s Chicago-based DRW Holdings LLC filed an application with the city June 25 to change the zoning for the property at 832-856 W. Fulton Market, where DRW plans the bowling alley from New York-based Brooklyn Bowl. But the application limits the development to three stories and makes no mention of the hotel that had been included in previous plans. The building would have stood 17 stories with many as 200 rooms. In the plan filed with the city, maximum height would be 50 feet… Crain’s Chicago
   
2. Engagement Is Open Space’s Driving Force – Different degrees of open space in an office environment are acceptable to different firms, and it’s the design team’s job to determine the which degree matches the clients’ needs best, Heidi Hendy, founding principal of H. Hendy Associates, tells GlobeSt.com. But a uniting force behind all degrees of open-space work environments is the need for engagement among staff members. As GlobeSt.com reported in May, the locally based interior architecture firm has completed the construction of Monster Energy’s new headquarters building at 1010 Railroad St. in Corona, CA… Globe St.
   
3. GE spinoff moving to Loop office complex – The owner of a 60-story Loop office complex brought in a General Electric Capital Corp. subsidiary to help offset the future loss of its two largest tenants. Retail Finance International Holdings Inc., a consumer finance unit of Norwalk, Connecticut-based GE Capital, signed a 76,000-square-foot lease at 227 W. Monroe St. in Franklin Center, according to a person familiar with the deal. The lease closed in the second quarter, and the GE unit is moving from office space the company occupies at nearby 500 W. Monroe St., the person said… Crain’s Chicago
   
4. The Roll of the Office Cycle – In many ways, the office sector’s position along the real estate cycle resembles that of the 2005/2006 period. The market is rising at a steady pace, as it did in 2005 and 2006: average national vacancies, which have fallen for four years straight, are under 12 percent and closely aligned with 2005 levels. Investors are once again underwriting strong income growth, as rents signed at the bottom of the market will receive mark-ups when they roll to market rate—at least at the better-quality assets. Liquidity is strong, with trading volume well above historical averages and nearly back to 2007 peaks (when the assets of the former Equity Office Properties portfolio ping-ponged between investors)… NREI
   
5. Office Recovery Spreads Across US – During the second quarter, the US office sector reached a milestone on its road to a true recovery, according to a new research by JLL. Although office users and landlords reported a lot of activity, it was perhaps more significant that increased velocity was seen in markets far beyond the gateway cities and areas like New York, San Francisco and Silicon Valley. “First and foremost, we saw in the second quarter about 14-million-square-feet of net absorption,” John Sikaitis, JLL’s managing director for local markets and office research, tells GlobeSt.com, a boost of about 38% from the second quarter of last year. Overall, tenants leased 61.9-million-square-feet of space during the second quarter… Globe St.

Tom’s Recommended Reading for the Week

Check out the top news in Chicago commercial real estate before heading into the weekend!

1. Five Reasons People are More Important Than Buildings – The word “office” doesn’t mean what it used to. When workers refer to going into the office, they could mean they’re heading to the brick-and-mortar building that houses their company, but they could also be referring to the unlimited expanse of the digital and technological world that connects the workforce in previously unimaginable ways. Today’s office travels where the worker goes.This worker-centric structure requires that the workspace be flexible, mobile, and managed by technology. Times are changing, and the office needs to keep up. Here are five ways offices should already be putting people first… WorkDesign Magazine
   
2. LaSalle Street office towers sell for $270 million – Two office towers facing each other on LaSalle Street sold for more than $270 million combined. New York-based AmTrust Realty Corp. paid $237.5 million for the 43-story tower at 30 N. LaSalle St., while Chicago-based John Buck Co. paid $32.8 million to seize a financially distressed 38-story tower at 33 N. LaSalle St. through a deed-in-lieu of foreclosure, according to Cook County property records… Crain’s Chicago
   
3. New, state-of-the-art headquarters to stand as symbol of Zurich’s growth in North America – Zurich North America Commercial and North American Regional Chairman Mike Foley and dignitaries, including Illinois State Sen. Dan Kotowski, Illinois State Rep. Michelle Mussman and Schaumburg Mayor Al Larson, have broke ground on Zurich’s new North American headquarters. The 40-acre site will be home to the 735,000-square-foot-building that will house 2,500 employees and contractors who work in Schaumburg and live in the surrounding communities… RE Journals 
   
4. Rent jump at Chicago’s best office towers – Chicago office landlords that endured the recession are enjoying a comeback — for those who own high-end towers, anyway. Landlords with upper-tier buildings collected a lot more in rent last year than they did in 2012, according to a report by New York-based Savills Studley. The report looks at effective rents, which factor in extra costs that affect how much landlords take in and tenants pay out… Crain’s Chicago
   
5. Tech Firms Hitting the Tipping Point – According to the new MBRE Index, landlords of the 30 newest class A office buildings in downtown Chicago saw, partly due to significant leases signed by tech firms, the direct vacancy rates for their properties decline over the last quarter from 11.2% to 10.3%. The decline was a recovery from the previous quarter, when the same buildings had an increase in vacancy, breaking what had become a pattern of steady improvement in the market… Globe St.

Tom’s Recommended Reading for the Week

Check out the top news in Chicago commercial real estate before heading into the weekend!

1. Charles Schwab Chooses 150 S Wacker as long-term home – Charles Schwab has selected 150 South Wacker Drive for its corporate offices, inking a lease for 105,000 rentable square feet at the strategically located West Loop office tower. Schwab was represented by Colliers International, and ownership of 150 South Wacker Drive was represented by Fulcrum Asset Advisors, LLC and Lincoln Property Company. With its 65,000 square foot expansion, Charles Schwab is now the largest tenant at 150 South Wacker Drive, and has committed to occupy 20% of the building… RE Journals
   
2. Musicians performing in glass at the Hancock? Could Happen – Not long after luring thrill-seekers to the “Tilt” on its 94th-floor observation deck, the John Hancock Center may get an eye-catching addition at street level. An owner of the 100-story tower hopes musicians will soon entertain crowds in the public plaza from inside a glass, diamond-shaped structure rising four to five stories above North Michigan Avenue… Crain’s Chicago
   
3. Sterling Bay Launches Remake of Post Office – A lot of rumors have swirled around the eventual fate of the city’s old Main Post Office Building, but yesterday officials from Sterling Bay Companies said they would partner with owner Bill Davies, chair of International Property Developers North America, to redevelop the property. The partners envision that the first phase will cost $500 million and transform the hulking structure, which arches over the Eisenhower Expressway, into 2.7-million-square-feet of modern office space and retail amenities… Globe St.
   
4. War for Talent Driving Office Leasing Decisions – There’s a massive shortage of available workers between the ages of 18 through 64 happening today, a trend that is causing company CEOs sleeplessness and will ultimately affect where prime offices will be located by 2030.According to a recently released Cushman & Wakefield report, “Human Capital: The War for Talent and its Effect on Real Estate… NREI
   
5. Trouble at Top – The Willis Tower in Chicago—formerly the Sears Tower—is hitting a patch of financial turbulence as its owners try to fill vacant space. Earlier this month, Fitch Ratings reported that the owners of the boxy, black skyscraper were seeking a loan modification to complete a lease. The ratings company said the $774 million mortgage on the tower was transferred to the control of special servicer CWCapital Asset Management LLC, a distressed-debt specialist that oversees modifications on behalf of investors that hold the tower’s debt… Wall Street Journal

Tom’s Recommended Reading for the Week

Check out the top news in Chicago commercial real estate before heading into the weekend!

1. Chicago’s Suburbs Suffer from Companies’ Flight to CBD – As members of the millennial generation continue to choose downtown living, the companies that follow them may be the bigger story of the economic recovery. But this flight to urban cores is coming at the expense of suburban class-A office parks.Suburban Chicago’s 155-million-sq.-ft. office market, which now has approximately a 23 percent vacancy rate, shows a continued struggle for relevancy. The Windy City’s suburbs experienced 1.2 million sq. ft. of negative space absorption in the first quarter, with demand stunted in part because large firms were either packing up and moving downtown or consolidating multiple uses in single locations. The moves included Motorola Mobility’s removal from 1 million sq. ft. in Libertyville, Ill. to the Merchandise Mart in the Chicago Central Business District (CBD), and Capital One leaving 200,000 sq. ft. in Mettawa to move to the former United Airlines space at 77 West Wacker… NREI
   
2. Energy, Jobs Loom Largest as CRE Issues – The number one issue affecting commercial real estate in the near and long term? America’s growing energy independence, says the Chicago-based Counselors of Real Estate, which put it at the top of its annual Top Ten Issues Affecting Real Estate list, released Wednesday. Other issues in the association’s top 10 list this year: jobs, millennials, healthcare, globalization, water supply, the capital markets, housing, manufacturing and agriculture. “The list reflects growing economic and political turmoil, changing demographics and the lifestyle choices of an emerging generation, rising energy independence in the United States and a strengthening job market fueled in part by massive changes in the delivery of healthcare,”… Globe St.
   
3. Four new hotels under way in Schaumburg – The long paralyzed growth of the hospitality industry in Schaumburg will break its shackles this summer as construction gets under way on four new hotels. Final approval is scheduled Tuesday for an extended-stay TownePlace Suites and a short-stay Fairfield Inn & Suites to be built side by side along National Parkway, near Higgins Road and the Tilted Kilt restaurant. A 93,000-square-foot Cambria Suites hotel delayed by economic concerns since its approval in 2006 has changed to a Radisson hotel and will break ground next month… DailyHerald
   
4. Office investor doubles down on Monroe Street with $122 million buy – A Florida office investor is paying about $122 million for a 29-story Loop tower next to another office building it already owns. Real estate fund manager Beacon Investment Properties LLC is working to finalize a deal in which it would pay about $196 per square foot for 230 W. Monroe St., which is about 32 percent vacant, according to people familiar with the transaction. Although it is a relative newcomer to Chicago, Beacon is quickly gaining familiarity with the neighborhood around the 623,524-square-foot tower, which was completed in 1971… Crain’s Chicago
   
5. Incremental Improvements in the Office Market Are No Longer a Surprise – The national vacancy rate for the office sector fell to 16.8 percent in the second quarter, a 10 basis point decline over the first quarter of the year. This is in line with trends witnessed over the last three and a half years. Vacancies peaked at 17.6 percent in late 2010, and since then any recorded declines were no larger than 10 basis points. It has certainly been a slow recovery, but quite in line with expectations, given an economy that has been growing at an average of 2 percent per year since the end of the recession. On a slightly positive note, net absorption registered its highest quarterly increase since late 2007, with occupied stock rising by 9.8 million sq. ft… NREI

Tom’s Recommended Reading for the Week

Check out the top news in Chicago commercial real estate before heading into the weekend!

1. After Hancock buy, Hearn to pay $375 million for Loop office tower  –  In yet another sign of climbing office building values downtown, Hearn Co. is paying about $375 million for the 57-story Three First National Plaza in the Loop. Chicago-based Hearn will pay about $260 per square foot, or 9 percent more than a Hong Kong-South Korea venture paid less than three years ago for the 1.4 million-square-foot tower at 70 W. Madison St., according to people familiar with the transaction… Crain’s Chicago
   
2. Art Deco tower on Wacker Drive could fetch $48 million –  An 85-year-old riverside tower previously redeveloped as an office condominium building is now being offered for sale outright, with the owners hoping to fetch close to $48 million. The owners, a group of South American investors affiliated with Miami-based Cape Horn Group LLC, hired Los Angeles-based CBRE Inc. to sell most of the 41-story art deco tower at 221 N. LaSalle St., also known as the LaSalle-Wacker Building, confirmed Dan Deuter, senior vice president in CBRE’s Chicago office… Crain’s Chicago
   
3. Five Ways to Make Your Office A Happier, More Productive Place –  According to Gallup’s 2013 State of the American Workplace Report, which surveyed more than 150,000 full- and part-time workers, only 30 percent of employees are engaged and inspired at work. A happy worker means a more productive worker, so it’s important that managers make serious efforts to make their workplace more enjoyable. So what is it that today’s workforce wants? And how can you give it to them in a way that’s cost-effective and best for your company? Elizabeth Dukes, co-author of Wide Open Workspace and co-founder of iOffice, has five suggestions… Work Design
   
4. Chicago’s land marking push unsettles burgeoning Fulton Market area – Richard Pastorelli’s family has worked in the West Loop market district for 87 years and has a colorful history to show for it. Pastorelli, president of the company his grandfather founded in 1927, said Pastorelli Food Products survived its early years by bartering with the manufacturers that lined Randolph Street, trading truckloads of sugar and soap chips for paper and canned goods. During the Depression, he said, the company sold sugar primarily to Al Capone’s distilleries that occupied the second floors of many buildings along the corridor… Chicago Tribune
   
5. O’Hare Marriott owner plans big office project next door –  More than four decades after it was built, the Chicago Marriott O’Hare could add some new neighbors—office tenants. The property’s owner, Host Hotels & Resorts Inc., is asking the city for a zoning amendment that would allow development of 750,000 square feet of new office space and a 3,000-space parking garage, according to plans filed with the city. Host’s plans show three office buildings of up to 18 floors surrounding the parking structure, all of which would be built along the west side of the hotel. The site is on Higgins Road on the north side of the Kennedy Expressway, between River and Cumberland roads… Crain’s Chicago

Tom’s Recommended Reading for the Week

Check out the top news in Chicago commercial real estate before heading into the weekend!

1. Co-Working Centers Continue to Carve Out Bigger Niche – Although it remains a highly fragmented industry, companies catering to the demand for co-working or shared office spaces are continuing to expand and add more services to appeal to today’s workers on the go. There continues to be healthy growth in all sectors of the “workspace on demand” niche, ranging from business centers and executive suites to incubators and even hotels that are now offering drop-in space on a permanent or temporary basis, notes Mark Gilbreath, founder and CEO of LiquidSpace in San Francisco… NREI
   
2. Building Owners Brace for Common Approach to Measuring Office Space – One of the biggest complaints of office tenants is that building owners throughout the world use different systems for measuring how many square feet or square meters tenants are leasing, deviating as much as 24% from one another. Now an international coalition of real-estate organizations formed last year is hoping to change that. The International Property Measurement Standards Coalition in June plans to announce a single measurement system for the global office market. “The current situation on measuring standards is totally unacceptable,” said Ken Creighton, chair of the coalition’s board of trustees. But whether or not building owners adopt or ignore the standards remains to be seen… Wall Street Journal 
   
3. Health Care Systems Seek Ways to Monetize MOBs – Hospitals and other health care providers, already dealing with changes brought by the new Affordable Care Act (ACA), are selling their assets to third party owners to reap the benefits of escalating property prices. Recent studies on medical office buildings (MOBs) by Colliers International, Newmark Grubb Knight Frank and JLL indicate that an abrupt slowdown in new development in 2013, along with the expected increase in demand for MOB properties, has created intense interest from investors… NREI
   
4. Sam Zell takes charge of REIT, moves HQ to Chicago – Seven years after selling Equity Office Properties Trust, Sam Zell is the newly minted chairman of another Chicago-based office REIT. CommonWealth REIT shareholders today voted in a new board including the Chicago billionaire, marking the completion of a 15-month effort by Corvex Management LP and Related Cos. to overthrow management and install new trustees. The new board then installed Mr. Zell as chairman of the real estate investment trust and his deputy David Helfand as its president, CEO and acting chief financial officer and treasurer… Crain’s Chicago
   
5. Here’s what it looks like when Willis Tower’s Ledge cracks – The Ledge tourist attraction at the Willis Tower has been closed after a report of cracking glass at the 103rd-floor attraction.The Ledge has been closed for a “routine inspection,” but the building’s Skydeck tourist venue on the 103rd floor remains open, said a Willis Tower spokesman. Earlier this morning, the spokesman said the Ledge remained open.The spokesman said a visitor is believed to have cracked the protective coating on one of the glass boxes, likely with a sharp object, at the Ledge while the venue was open last night… Crain’s Chicago

Tom’s Recommended Reading for the Week

It’s starting to feel like summer in Chicago with the temperature rising (keep your fingers crossed). Check out our top Chicago Commercial Real Estate articles before heading into the weekend!

1. Give the People What They Want – A recent survey conducted by Mancini Duffy and designed to gain insight into ways that companies can maximize workplace performance to produce successful business results found a large disconnect between what’s most important to employees in the workplace and what employers are currently providing. Focusing on the importance and current performance of workplace characteristics in the areas of brand, talent, agility and work patterns, responses were consistent across the 20 industry sectors represented, with themes recurring across the four categories. Furthermore, many of the characteristics cited as most important to employees were not only relatively easy givebacks, but ones that could increase flexibility and efficiency, better support the way people want and need to work and enhance the image of the corporation… NREI
   
2. Marketing Technology Startup, Revenew, Moves headquarters to Downtown Chicago – Chicago Mayor Rahm Emanuel and Revenew CEO Nasrin Thierer announced today that the marketing technology startup has relocated from Palatine to downtown Chicago. The new office, at 200 W. Monroe Street, places Revenew in the heart of the city’s tech startup community, and houses the company’s thirty-plus employees, with room to accommodate additional planned growth.“Revenew’s relocation to downtown Chicago is a testament to our city’s growing status as a leading technology hub, which attracts the most innovative startups and top technology talent from all over the country,” said Mayor Rahm Emanuel. “I welcome Revenew to its new home and look forward to working with them and other startups as the industry continues to create 21st century jobs and opportunities for Chicagoans… World Business Chicago
   
3. Chicago Stock Exchange Stays Put – The shift to electronic trading made the physical trading floor of the Chicago Stock Exchange unnecessary, and several years ago, the CSE gave up about 62,000-square-feet of the space it occupied for decades at One Financial Place, 440 S. LaSalle. That left the exchange with about 50,000-square-feet in the 40-story, 1-million-square-foot tower that anchors the southern end of the city’s financial district. And now the exchange has decided to give up about one-third of that space as it shifts to a more collaborative office layout.It has just signed a long-term renewal of about 33,000-square-feet at 440 S. LaSalle. The exchange has operated on the seventh and eighth floor, but will now consolidate operations onto one floor… Globe St.
   
4. Walgreen checked out Main Post Office for HQ: report – In search of new digs for their headquarters, Walgreen Co. has scouted the hulking cement block that formerly housed the Main Post Office in the South Loop.But the Deerfield-based drugstore chain isn’t tipping their hand.The company told Crain’s Chicago Business it was “not engaged with developers on any new locations for our corporate headquarters.”But Crain’s reports that British developer Bill Davies, who owns the building, has negotiated with Walgreen without reaching an agreement.A source tells the Sun-Times that Walgreen reps were at the Illinois Department of Commerce and Economic Opportunity in January expressing interest in the post office, but discussions — described as preliminary — never broached job numbers or state incentives… Chicago Sun Times
   
5. Strong Employment Numbers Lead to Hope for More Office Leases – There was a surge in hiring among national office tenants in April, with an addition of 75,000 new jobs, an increase representing more than one-third of the growth seen during the past 12 months. April’s improved employment statistics were reflected in most industries, with total non-agriculture new jobs rising by 288,000 and the national unemployment rate dropping to 6.3 percent, according to the U.S. Bureau of Labor. Employment in professional and business services increased by an average of 55,000 new jobs per month over the past year. The retail segment also saw an increase of about 35,000 new jobs in April, while growth in industrial employment was largely unchanged from previous months… NREI

Tom’s Recommended Reading for the Week

After the 4 day break this week, the Blackhawks continue their road to the Stanley Cup finals. Check out our top Chicago commercial real estate articles before the game tonight!

1. Toyota’s Jilting of California a jolt to Illinois – Sometimes they just leave. Without warning, they announce it’s over before you can beg and plead and promise. They tell you they’ve found a better fit, a partner that does things for them you haven’t or can’t. So they’re moving on and taking part of you with them. That’s what Toyota did this week to California. Anyone who worries about business in Illinois should take heed. Divorce is rampant these days. The Japanese carmaker, which gained a foothold in America through its relationship with Southern California, abruptly announced it will shift around 3,000 marketing and finance jobs from Torrance, Calif., to Plano, Texas, where it’s establishing a new North American headquarters outside Dallas… Chicago Tribune
   
2. Sun-Times to shrink space at River North HQ – After cutting jobs, the owner of the Chicago Sun-Times is cutting office space at its riverfront headquarters. Wrapports LLC, which owns the Sun-Times Media Group newspapers, is negotiating a lease for about 45,000 square feet in the River North Point office building at Orleans Street and the Chicago River, according to people familiar with its plans. That’s a 54 percent reduction from the 98,000 square feet it currently leases in the 23-story building, formerly known as the Apparel Center, where the Sun-Times moved in 2004. San Francisco-based Shorenstein Properties LLC, which owns River North Point, in January confirmed that the Sun-Times’ parent exercised an option to end its lease in the fourth quarter of this year. At the time, Shorenstein left open the possibility that Wrapports could downsize and stay put… Crain’s Chicago
   
3. Five Office Designs to Increase Productivity – Designers and architects have pondered how to design an office to encourage productivity for more than 100 years. In the early 20th century, offices resembled factories. Starting in the 1960s layouts changed to foster teamwork. And by the beginning of the 21st century, office design sought to inspire creativity. “Under each fad, there were ideas ahead of their time,” says Stephen Apking, an interior-design partner at the architecture firm Skidmore, Owings & Merrill LLP. Many ideas from the 20th century have been improved and incorporated into 21st century design, Mr. Apking adds… Wall Street Journal
   
4. Place Making That Works: Physical Location, Technology, and Knowledge Sharing – Employers continue to be concerned with how to utilize corporate culture and physical workspace to attract the skills and talents needed for their organization’s future. While compensation and benefits are crucial elements that affect recruitment and retention, there are also three key aspects of an organization that cannot be overlooked in this process: physical location, technology and knowledge sharing. To attract the talent a company desires, employers must offer the correct mix of an attractive location, supply modern technological tools and provide employees with opportunities to develop meaningful connections with co-workers. Increasingly, organizations are examining how to best make use of this mix in their workspaces, using the physical workplace as an integral tool to help recruit and retain the best talent and create spaces that will appeal to the multiple generations in today’s workforce… WorkDesign Magazine 
   
5. Buck preps residential makeover for H20 Plus building – Developer John Buck plans to give the West Loop headquarters of skincare products maker H2O Plus a major facelift that could include as many as 500 residential units. Chicago-based John Buck Co. has agreed to pay a little more than $20 million for the two-story building at 845 W. Madison St., with plans to redevelop the property in a couple years, according to people familiar with the transaction. H2O Plus CEO Rick Ruffolo confirmed via email that the Chicago-based company, which makes shower gels, lotions, shampoos and face creams, has been “in regular communication” with company founder Cindy Melk, who owns the property, and Buck regarding the pending sale of the 90,000-square-foot building. H2O Plus plans to find a new home… Crain’s Chicago

Tom’s Recommended Reading for the Week

Eventful week in Chicago as summer approaches. Check out our top Chicago commercial real estate articles before heading into the weekend!

1. 14 Ways the Workplace is Evolving  – Mobility versus routine. Distraction versus focus. Command-and-control management versus employee choice. As corporate cultural battles play out, workplaces have become the battleground, with outcomes increasingly dependent on worker engagement, health, well-being and a sense of belonging or purpose. The following are 14 workplace trends reshaping corporate cultures in 2014 and beyond… Globe St.
   
2. How Your Office Is Harming Your Health  – Many of us spend a large chunk of our waking lives at work, but rarely do we give much thought to how our on-the-clock environment might be affecting how we feel around the clock. If the recent literature has anything to say about it, working in offices could be making us feel pretty crappy. Open office plans (and cubicles, to a certain extent) may be the worst offenders when it comes to harming employee wellness and productivity, and some studies on the fallbacks of the popular design have called the entire structure of American work life into question… Huffington Post
   
3. More Metrics Needed for Medical Office Buildings Sector – Medical office buildings (MOBs) are starting to overtake hospitals as the preferred new property type for health care systems, but real estate market statistics for MOBs are still lumped into the broader health care category, making data and trends hard to obtain for newcomer investors. The traditional MOB is now evolving into more of a full-service, ambulatory care model that is causing hospitals to distribute resources differently and re-examine expenditures, especially when it comes to real estate decisions. Two recent reports have detailed the need for hospitals and health care systems to be more aware of modern customer needs for local comprehensive care facilities… NREI
   
4. Office Recovery Hits Halfway Point as Demand for Space Spreads Across More U.S. Markets  –The U.S. office recovery continued to hum quietly along in the first quarter, absent any dramatic surges or spikes. As a result of the measured pace of increasing tenant demand, the national office vacancy rate remained unchanged from the previous quarter at 11.9%, according to CoStar’s First Quarter 2014 Office Review and Outlook. Overall net absorption of U.S. office space is running ahead of last year’s pace with 74 million square feet absorbed over the last 12 months, compared with 61 million square feet during the previous year period through first-quarter 2013… CoStar
   
5. John Buck moves in on struggling Loop office tower – John Buck Co., best known for developing trophy office towers on Wacker Drive, is about to take control of a vintage Loop building that’s been reeling since the city of Chicago vacated nearly a third of it last year. Chicago-based Buck is in advanced talks to assume ownership of the Class B structure at 33 N. LaSalle St. for less than the remaining debt on the 38-story art deco tower, according to people familiar with the transaction. The building’s owners, Chicago-based Golub & Co. and German shipping and real estate firm Norddeutsche Vermogen, owed nearly $42.5 million when they negotiated a loan modification in December 2012 with New York-based AXA Equitable Life Insurance Co., according to Cook County records… Crain’s Chicago

Tom’s Recommended Reading for the Week

The NHL playoff season has begun. Lets go Blackhawks!! Check out our top Chicago Commercial Real Estate articles as you head into the weekend.

1. Duchossois family plans Oak Brook office development  – A venture of the Duchossois family bought four no-frills office buildings in Oak Brook that it may tear down for an office development of at least 200,000 square feet. The real estate arm of Elmhurst-based Duchossois Group Inc., known for a variety of investments including horse racetracks such as Churchill Downs and garage door opener company Chamberlain Group Inc., acquired the adjacent buildings March 31, a spokeswoman confirmed… Crain’s Chicago
   
2. Investor Mizrachi looks to build one West Loop tower, sell another – Florida investor Joseph Mizrachi wants to build a hotel and office tower in the West Loop while selling an office building several blocks away that he hopes will attract offers of $335 million or more. Mr. Mizrachi plans a nearly 1.1 million-square-foot hotel and office tower on land at Jefferson and Madison streets, according to people familiar with his plans. He and New York investor David Werner took over the parcel through their $350 million acquisition in late 2012 of 540 W. Madison St., the office building next door… Crain’s Chicago
   
3. Using Collaborative Office Strategies – Corporate users across the metro area have begun transforming their offices into more collaborative, wide-open spaces, and many more have become intrigued by the trend. But experts say before a proper transformation takes place, designers need to have a lot of interaction with workers.“I would sit on the floor with groups of employees,” Debbie Fangman, facility manager for Gogo, told a panel discussion group on Thursday, and stay there asking questions until she understood “how they deal with the obstacles in our current system… Globe St.
   
4. Tech’s Impact on Office Leasing  – Greater digitalization, tighter cubicle spaces, more freedom for collaboration and the disappearance of the Baby Boom generation. All of these factors are changing the way corporate America works…and will ultimately impact how commercial office brokers and developers ply their trades. So says Beth Campbell, principal and managing director in the local office of architecture and design giant Gensler. “People are signing 10, 15 even 20-year leases,” she says. “But how will the office technology look then? There is a challenge in this system… Globe St.
   
5. Thinking About Office Development: Consider These Submarkets – If you’re thinking about building office space in this cycle, you’d better dust off those blueprints and get back into the game soon, before it’s too late. The office cycle is about halfway through the recovery phase: Demand continues to rise and is expected to peak by 2015-16. Supply remains mostly concentrated in a handful of markets, rent growth finally cracked the 3% level last year, and NOI growth should return in 2014. All this means that projects kicking up dirt this year will deliver — and more importantly, stabilize — just in time, before fundamentals unwind… CoStar
   

Tom’s Recommended Reading for the Week

It looks like Chicago has finally decided that it’s time for spring and great weather! Check out the top news in the Chicago Commercial Real Estate Industry before heading into the weekend and happy Friday!

1. Office Market Continues to Gain Momentum – First quarter office sector studies show that in most of the nation’s office markets, rather than just in the top cities, landlords are gaining the upper hand.About 70 percent of U.S. office markets reported occupancy gains during the first quarter, according to commercial real estate services firm Cassidy Turley. The markets absorbed 12 million sq. ft. collectively from January through March 2014, up 63 percent from the first quarter of 2013… NREI 
   
2. How workplace design looks to Groupon, Gogo and Herman Miller – Collaboration areas, whiteboard walls and spaces for private conversation drive workplace design at Groupon and Gogo, company officials said at a panel discussion Thursday.Even amid fast growth, Chicago-based Groupon stuck to workbench-style seating to foster collaboration. Gogo, an inflight Internet provider that is about to move to River West from Itasca, said its new space will be designed around employee needs… Chicago Tribune
   
3. Small leases, big office vacancy in suburbs – After opening 2014 with just one lease larger than 50,000 square feet, landlords in suburban Chicago are back to where they were a year earlier.Lacking large new deals, overall suburban vacancy ticked up a notch during the first quarter of the year to 24.4 percent, the same as it was a year earlier, according to Chicago-based Jones Lang LaSalle Inc… Crain’s Chicago
   
4. CareerBuilder consolidates LaSalle Street offices – CareerBuilder LLC is merging one of its Loop offices into a neighboring tower, boosting the size of its Chicago headquarters as parent Tribune Co. prepares to split its business lines.The Chicago-based job search website is adding 47,466 square feet to its headquarters at 200 N. LaSalle St... Crain’s Chicago
   
5. Add $45 million Buffalo Grove deal to Florida investor’s office spree – A Florida buyer is set to pay about $45 million for a 12-story Buffalo Grove office tower, continuing an aggressive initial push into the Chicago area.Beacon Investment Properties LLC, which hadn’t invested in Chicago until late 2013, plans to buy Riverwalk II… Crain’s Chicago

Tom’s Recommended Reading for the Week

Baseball season has finally started! Too bad the Cubs and White Sox didn’t bring the warm weather back with them from Spring Training. Enjoy these Chicago Commercial Real Estate news articles and have a great weekend!

1. 2014 Top Brokers – It was another year of robust growth for commercial real estate brokerage firms. Increases in investment sales and leasing activity enabled many of the firms on our list to grow their transaction volumes by 15 percent or more, with some firms experiencing particularly robust growth rates.The top dog on our list remains CBRE Group Inc. It is the 11th consecutive year that CBRE has lead the industry in total transaction volume. The firm reported a total volume of $233.30 billion in 2013, a 17.7 percent increase over 2012’s figure of $189.80 billion… NREI 
   
2. After eight-year hiatus, Japanese return to downtown office market  –  A subsidiary of Tokyo-based conglomerate Sumitomo Corp. has paid $111.5 million for a downtown office tower, the first such acquisition by a Japanese investor in eight years. New York-based Sumitomo Corp. of Americas, a wholly owned subsidiary of the Japanese firm, acquired the 581,107-square-foot office portion of the 27-story tower at 203 N. LaSalle St. yesterday, confirmed Tomonori Wada, a senior vice president who oversees the Sumitomo group that includes real estate, food and tire businesses… Crain’s Chicago
   
3. Growth Is Picking Up In U.S. Office Market – The U.S. office market is showing signs of picking up steam, with businesses adding space in the first quarter at the fastest pace since 2007, according to a report from real-estate data firm Reis Inc. The amount of occupied office space grew by 9.8 million square feet in the first three months of the year, up from 9 million square feet in the fourth quarter of 2013 and an average of 5.2 million square feet a quarter between 2011 and 2013, according to Reis…         Wall Street Journal
   
4. Chicago Lays Out a Complex Plan for the Future of the Fulton-Randolph Market Area – The future of the Fulton-Randolph Market District could well look back on its past. Representatives of the Chicago Department of Planning and Development described an ambitious plan for ongoing development of the district. That plan will pay respect to the feel of the district’s heritage, even down to the exterior building design and streetscapes... The Chicago Architecture Blog
   
5. Top Commercial Real Estate Firms and Brokers in Chicago Win CoStar Power Broker Awards – The winners of the annual CoStar Power Broker Awards have been announced, and several top firms and real estate brokers in Chicago are among the winners. Recognizing the “best of the best” in commercial real estate brokerage, the CoStar Power Broker Awards are presented each year to a select group of local real estate firms and individual brokers who achieved the highest overall transaction volumes in commercial property sales and leases in their market during 2013… CoStar Group

Tom’s Recommended Reading for the Week

This week I was able to make a trip out to sunny California. Unfortunately, I was not able to bring back the nice weather. Hopefully this week’s recommended articles can warm you up a bit. Enjoy!

1. Tale of Two Cities: City vs. Suburbs – Across the US, corporate users continue to migrate into downtown office properties as they hunt for those younger employees who reject suburban lifestyles. But yesterday, at Marcus & Millichap Real Estate Investment Services’ CRE Forum in Chicago, several executives grappled with this trend at a morning panel, and the general feeling was that the present imbalance between city and suburbs would not last… Globe St.
   
2. The Optimal Office  –  Though the “open plan” modern office, with its sea of desks, might look like the offspring of a newsroom or a trading floor, it can also trace its heritage to 1960s Germany. There, two brothers who worked in their father’s office-furniture business kicked off the Bürolandschaft, or “office landscape,” movement, which sought to boost communication and efficiency and de-emphasize status. As the idea took hold in North America in the decades that followed, employers switched from traditional offices with one or two people per room to large, wall-less spaces. By the turn of the century, roughly two-thirds of U.S. workers spent their days in open-plan offices… The Atlantic
   
3. The Office Recovery Still Has Legs – This part of the cycle looks quite favorable for the office property sector. All of the key areas of the market are improving; absorption is up, supply remains under control in aggregate, rent growth is accelerating, and investors continue to allocate capital to the sector.That being said, there is still plenty of room to run. The recovery appears to be only halfway through, after all… CoStar Group
   
4. Empty space, full wallet for Loop office owners – Empty office space may no longer leave Loop landlords with an empty feeling.In a sign of improving times for the downtown Chicago office market, real estate company Lincoln Property Co. and investment manager PIMCO are preparing to put the 29-story office tower at 230 W. Monroe St. on the for-sale market, where bids could approach $200 per square foot, or nearly $125 million, despite nearly a third of the space being unoccupied, sources said… Crain’s Chicago
   
5. River North tech leases soften the blow of Google’s goodbye – A River North landlord that will lose Google Inc. next year didn’t search far for two office tenants that could potentially fill some of the tech titan’s space. Chicago-based Sittercity Inc. and Modest Inc., a local startup led by the top techie for President Obama’s re-election campaign, collectively leased about 24,000 square feet at 20 W. Kinzie St., according to the office tower’s owner, Skokie-based Alter Group Ltd… Crain’s Chicago
   

Tom’s Recommended Reading for the Week

An exciting couple days ahead of us with the NCAA tournament starting yesterday. Check out these articles before heading into the action packed weekend!

1. Clashing Over Office Clutter – All nine employees of TheSquareFoot.com in New York City have neat, clean desks—except one.Co-founder Jonathan Wasserstrum’s desk and the floor around it are strewed with paper, files, tech gear and old boxes. “I like being near my stuff rather than fishing for it in a cabinet somewhere,” he says. Being near Mr. Wasserstrum’s stuff is harder for Justin Lee, the company’s other co-founder. At times, “some of his crud will spill over onto my desk,” Mr. Lee says. Other co-workers at the online commercial real-estate leasing and brokerage company sometimes print new copies of documents to avoid handling food-smeared paperwork from Mr. Wasserstrum’s desk… Wall Street Journal 
   
2. Downtown office sales hit highest level since 2007  –  Investors spent more on downtown Chicago office buildings last year than they have in any year since the crash, drawn by an improving leasing market and the buzz generated by big corporate moves from the suburbs to downtown.Downtown office building sales totaled $3.25 billion last year, up 23 percent from 2012 and the highest total since 2007, according to Chicago-based Jones Lang LaSalle Inc… Crain’s Chicago
   
3. Rents for Trophy Office Space Pass Records, Spur New Construction – The national office market has rebounded, with no segment showing the comeback more clearly than trophy properties. It’s no surprise that class-A office space attracts the most demand, but what’s notable is how fast the landlords of those buildings have gotten back in the driver’s seat.A lack of development since the start of the recession, along with exploding demand in both traditional primary markets and those led by energy and technology booms, have pushed demand for class-A space through the roof… NREI
   
4. Oprah cuts her last commercial ties to Chicago – Oprah Winfrey, who put an obscure stretch of the Near West Side on the map when she moved her television show there in 1990, is set to sell Harpo Studios for around $32 million to a Chicago developer making its own dramatic imprint on the neighborhood.After a bidding war that enticed investors from as far away as China, Ms. Winfrey’s Harpo Inc. has agreed to sell the four-building campus to Sterling Bay Cos.For Ms. Winfrey, selling off the last of her commercial real estate represents a final step out of Chicago, which she left almost three years ago to form Oprah Winfrey Network in Los Angeles… Crain’s Chicago
   
5. Sterling Bay Companies completes Fulton West portfolio acquisition – Sterling Bay Companies has completed the acquisition of Fulton West, a portfolio of existing and partially completed office, retail and parking facilities, from an affiliate of Marc Realty. Sterling Bay purchased the property, with existing superstructure that can accommodate additional future development, for approximately $22 million. In its current stage of development, Fulton West consists of three loft-style office buildings totaling approximately 165,000 square feet and parking facilities — structures and surface lots — for more than 314 automobiles… RE Journals

Tom’s Recommended Reading for the Week

Happy St Patrick’s Day weekend! Does this mean that spring is finally here? Lets hope so. Check out these 5 articles before heading into the festive holiday weekend.

1. Google, Motorola, Lefkofsky back FEMtech incubator at 1871 – 1871 is about to become less of a boys’ club.The high-profile launchpad for tech companies at the Merchandise Mart will soon be home to 1871FEMtech, an incubator for women-owned tech startups.It’s part of a broader $1 million effort by Google Inc., called #40Forward, to help launch 40 incubators worldwide aimed at boosting women’s participation in technology by 25 percent this year. FEMtech also is being underwritten by the Motorola Mobility Foundation and the Lefkofsky Family Foundation, set up by Groupon Inc. co-founder Eric Lefkofsky and his wife, Liz… Crain’s Chicago
   
2. Where Google Refugees Are Going  –  Like animal print, the West Loop is so last season. We kid, but another bleeding-edge neighborhood is emerging for those priced out of Google’s new ‘hood..Dayton Street Partners just picked up a 37k SF loft building, 2101 W Carroll St, in the Kinzie Corridor, and founder Howard Wedren (above) tells us the area’s ripe for growth thanks to Fulton Market/West Loop mania. “Many tenants have been displaced and are looking for lower-cost options,” he says. (And if history’s taught us anything, they’ll go West, my son.)… Bisnow
   
3. Chicago Spire dream lives on under new deal  – The snakebit Chicago Spire — once forecast to be the tallest building in the Western Hemisphere and now a watery hole in the ground — took a modest step toward resurrection today.Irish developer Garrett Kelleher reached an agreement with his largest creditor over a financing plan that would allow him to keep control of the site and potentially begin searching for construction financing for the proposed 150-story, 1,194-unit project.Lawyers for Mr. Kelleher and the creditor, a venture led by New York-based Related Cos., announced the deal in principle this afternoon in U.S. Bankruptcy Court in Chicago… Crain’s Chicago 
   
4. Don Wilson venture takes control of Fulton Market building housing Publican – The Publican has a new landlord: trader Don Wilson, who repossessed the restaurant’s West Loop building more than two years after filing to foreclose on it.A venture of Mr. Wilson’s Chicago-based firm DRW Holdings LLC took over the building at 845 W. Fulton St. in January through a deed-in-lieu of foreclosure, or a kind of out-of-court settlement, with Robert Kowalski, a local developer and investor who owned the property through a trust, according to Cook County records… Crain’s Chicago
   
5. China Cinda Buys into 65-story Chicago Office Tower  – Chinese investors charged into the U.S. commercial real-estate market last year with high-profile deals in New York, Los Angeles and San Francisco. Now they’re buying in the middle of the country. Cindat Capital Management, partnering with Chicago-based Zeller Realty Group, on Tuesday paid just over $300 million to purchase a 65-story office tower in Chicago, at 311 South Wacker Dr., according to Zeller Executive Vice President Ari Glass… Wall Street Journal
   

Tom’s Recommended Reading for the Week

Eventful week with two technology based tenants announcing moves within the CBD! Check out those articles and others below.

1. Benchmarking Is Only a Starting Point  –In a complex and risk-averse business environment, benchmarking has become an essential decision support tool used by brokers and clients to determine how much space a company needs. Historically, firms have looked within their own industry, but lately, regardless of the industry, companies are asking, “What’s Google doing?” as shorthand for wanting to know what the technology industry is up to. Looking outside one’s industry for best practices can be a source of innovation, especially if a firm is looking to move in a new direction. But companies first need to try these characteristics on for size to see if they fit…  NREI
   
2. Chicago Named “Top Metro” in North America for Corporate Relocation and Expansions – Chicago was ranked the “Top Metro” in the U.S. for corporate investment in a report released today by Site Selection magazine, considered the “industry scoreboard for corporate investment and relocation professionals.” The publication recognized that the Chicago region was home to more new or expanded corporate facilities than any other metropolitan area in the nation in 2013, with 373 new and expanding companies, generating approximately 10,000 new jobs and $2.8 billion in investment… World Business Chicago
   
3. Fast-growing Twitter moving Chicago office to 111 N Canal  – Twitter Inc. is spreading its wings in Chicago, planning to move to new digs in the West Loop to accommodate its fast-growing staff.The company is leasing space at 111 N. Canal St., which is home to several other tech companies.The San Francisco-based social media company has been expanding rapidly in Chicago since early last year, before it went public. It hired Brad Keown from Facebook to oversee its central region sales teams from Detroit to Dallas. The company has more than doubled Chicago staff to about 30 since June and continues to hire… Crain’s Chicago 
   
4. Alter Group to sell portfolio, shrink workforce in strategy shift- Nearly two decades after taking over the family real estate business from his dad, Michael Alter oversees a nearly 3 million-square-foot commercial real estate portfolio that includes two River North office towers and stretches from Florida to Arizona. Now, with no heir apparent of his own, he’s preparing to sell it all… Crain’s Chicago
   
5. Fast-growing Uber hiring 150 people, moving Chicago office  – Uber is hitching a ride to Chicago’s meatpacking district, where it plans to hire another 150 employees in its Midwest headquarters by late 2015.San Francisco-based Uber Technologies Inc., which brought its taxi-hailing and ride-sharing smartphone appto Chicago in 2011, signed a three-year lease for the 12,000-square-foot building at 370 N. Carpenter St., where it plans to move by June, said Midwest General Manager Andrew Macdonald… Crain’s Chicago

Tom’s Recommended Reading for the Week

Happy Friday! Take a look at these articles heading into the weekend.

1. ADM picks former United Building in Chicago for new headquarters  –About two months after announcing its headquarters move to Chicago, Archer Daniels Midland Co. has a new home — one that recently lost the headquarters of another Fortune 500 company… Crain’s Chicago
   
2. Fulton Market buildings sold to Cedar Street ventures – After feasting on failed condominium projects, Cedar Street Cos. is continuing its push into office properties, acquiring two buildings a block away from the future Fulton Market home of Google Inc… Crain’s Chicago
3. Chicago picked as site for Obama’s manufacturing initiative – Chicago will be the site of a digital manufacturing institute backed by $70 million in federal money and another $250 million in private and other government funding, giving the city, once a factory town, a better chance to re-establish its credentials as a modern maker of things… Chicago Tribune
   
4. A New Trading Platform for Owning Office Property? – Very soon, if everything goes according to plan, individual investors will be able to buy and trade ownership stock in a single commercial real estate property, just like they would shares of common stock in a single company. The first property set as a test case for such trading is a noteworthy downtown Washington, DC, office building… CoStar
5. Negotiate an Exit When Entering a Lease Agreement – Upon boarding an airplane, passengers are given instructions on exiting the aircraft in the most expedient manner if the need arises. Evaluating exit strategies should also be a top priority for tenants upon entering a lease agreement… National Real Estate Investor 

Tom’s Recommended Reading for the Week

Hope everyone enjoys the last weekend of Olympic action. Catch up on your CRE news and take a look at these articles below.

1. Chicago’s new hotspot for tech startups  –When Dan Wagner went looking for bigger space for his fast-growing startup, Civis Analytics Inc., he wanted cool, affordable loft space downtown near other tech companies. Sounds like River North, right?… Crain’s Chicago
   
2. 1871 graduates find their way in new ‘real world’ offices – Many of Chicago’s aspiring young companies find their footing within the comfortable confines of 1871, surrounded by mentors and peers. After a time, however, the need for a space of their own takes over. Reserved seating at 1871 costs $400 per desk per month… Chicago Tribune 
3. Amid 17-story hotel plan, debate over Fulton Market’s future may only be beginning- Trader Don Wilson faces an uphill battle winning approval for his Fulton Market hotel project, a harbinger of complicated debates about development in the sizzling neighborhood.A venture of Mr. Wilson’s Chicago-based DRW Holdings LLC wants to build a 17-story hotel with up to 200 rooms, plus a three-story, 51,274-square-foot entertainment complex… Crain’s Chicago
4. Big city job numbers will shoulder apartment demand in Chicago – Chicago’s designation as one of Google’s seven national tech hubs will attract new start-ups to the city, amplifying its already strong employment prospects, which is good news for Chicago’s multifamily market, according to an apartment research market report by Marcus & Millichap Real Estate Investment Services… RE Journals
5. Chicago Spire developer, creditor agree on financing plan – The developer of the aborted Chicago Spire condominium tower has resolved a dispute with its largest creditor over a short-term financing plan for the property, but the bigger battle for control of the development site still lies ahead… Crain’s Chicago

Tom’s Recommended Reading for the Week

With the Olympics rounding up its first week, here are my 5 articles to start off your weekend. Enjoy!

1. The Science of Office Design  – Revelations in the realm of neuroscience, social science and behavioral science are all having a profound influence on workspace design. As researchers continue to pinpoint the cognitive impact of individual architectural elements, we can alter our environment accordingly… Entrepreneur
   
2. South Michigan Ave. Market Transforming – The recent sale of 200 S. Michigan Ave. by Equus Capital Partners, Ltd., for $69 million is yet another sign that the office market on S. Michigan Ave. has changed in the past few years. Although the sleek 22-story tower stands out a bit from its older neighbors, Joseph Neverauskas, senior vice president and head of Equus’ Chicago regional office, says the upgrade in its tenants since the private equity fund manager took over the building in 2000 reflects a neighborhood trend… Globe St.
3. Sam Zell joins in battle for control of office landlord- Chicago real estate billionaire Sam Zell and a top lieutenant have jumped into the battle for control of CommonWealth REIT, a Massachusetts-based office landlord that is under attack by two dissident shareholders. The New York-based shareholders, real estate firm Related Cos. and Corvex Management L.P., a hedge fund led by Keith Meister… Crain’s Chicago
4. Wrigley Building owners look to lure technology companies – Since 1924, the lights illuminating the white face of the Wrigley Building have almost continually shone. Now, the building’s owners want to shift the spotlight onto the tech companies they see as emblems of the future.”The Wrigley Building is a Chicago icon, and the technology community is quickly becoming iconic in its ability to create jobs,” entrepreneur Brad Keywell said… Chicago Tribune
5. Open Offices: Bad for Health, Efficiency? – Perhaps the most prominent fad in the world of commercial office space is the attempt to attract millennial workers by reconstructing traditional workplaces into open, collaborative spaces. In Chicago, the new strategy has been especially popular among tech companies and those involved in creative work such as advertising and most visible in the West Loop and River North submarkets where many of these firms have settled… Globe St.
   

Tom’s Recommended Reading for the Week

Looking for a quick glimpse into the Chicago commercial real estate world?  Our Research Associate, Tom Hanrahan will be sharing his picks for the week’s top CRE articles.   He’ll continue to update this with breaking news and feature stories for and about the commercial real estate industry.  Here are five to check out this weekend…

1. Mart says goodbye to Google, but Moto move on track  – The Merchandise Mart has basked in the Google glow ever since the technology titan’s July 2012 announcement that its Motorola Mobility business was moving there from Libertyville. Now, on the eve of its move into 604,000 square feet of the hulking Art Deco building, the Mart’s owner and the rest of the River North neighborhood are left to wonder: Can there be a Google effect without Google Inc.?… Crain’s Chicago
2. The Open-Office Trap – In 1973, my high school, Acton-Boxborough Regional, in Acton, Massachusetts, moved to a sprawling brick building at the foot of a hill. Inspired by architectural trends of the preceding decade, the classrooms in one of its wings didn’t have doors. The rooms opened up directly onto the hallway, and tidbits about the French Revolution, say, or Benjamin Franklin’s breakfast, would drift from one classroom to another. Distracting at best and frustrating at worst, wide-open classrooms went, for the most part, the way of other ill-considered architectural fads of the time, like concrete domes. (Following an eighty-million-dollar renovation and expansion, in 2005, none of the new wings at A.B.R.H.S. have open classrooms.) Yet the workplace counterpart of the open classroom, the open office, flourishes: some seventy per cent of all offices now have an open floor plan… The NewYorker 
   
3. For U.S. Office Market, It Was a Very Good Year- Investors are cheering the gains in asset values seen during 2013 from a strengthening recovery in the U.S. office market, and looking forward to an even brighter 2014 as virtually all the important metrics that drive rent growth and property income are expected to continue to improve over the next 12 months.The robust office market performance was the highlight of the year-in-review analysis and forecast webinar presented by CoStar market experts Walter Page, director of office research; Hans Nordby, managing director and corporate officer, and Aaron Jodka, manager, U.S. market research… CoStar
4. Lake Forest Office Building Catches Sam Zell’s eye – For the first time in seven years, real estate billionaire Sam Zell is a suburban Chicago landlord. A joint venture between Mr. Zell’s Equity Group Investments LLC and Chicago-based Fulcrum Asset Advisors LLC paid $13.1 million Jan. 16 for a 105,000-square-foot office building in north suburban Lake Forest that’s about one-quarter vacant, according to Lake County records… Crain’s Business Chicago
5. Food Genius gets cooking with $1 million, move to West Loop – “I’d go for the breakfast dog,” Justin Massa says. Even though it’s noon, breakfast is still on the menu at Little Goat, Stephanie Izard’s restaurant in the far West Loop, where the specials are a dog wrapped in a pancake and topped with a fried egg, and the Bull’s eye french toast, which also is topped with an egg and fried chicken bits.“I have to admit I’ve eaten both,” he says of the breakfast dog and French Toast, and a number of other items on the menu… Crain’s Business Chicago

Trends In Healthcare Real Estate

Since 2010, the healthcare industry has been preparing for the Patient Protection and Affordable Care Act (ACA). As surgeons,
physicians and nurses prepped for the insurance exchanges to open up this October, it is still unclear what will happen in 2014.

Medical professionals are proceeding with extreme caution when making major decisions that will impact their core business
operations, specifically with regards to their real estate expenses. Hospital administrators are increasingly looking at their real estate
to control costs in response to revenue constraints and operating cost pressures. Much of this uncertainty has resulted in mergers,
acquisitions and strategic alliances. These consolidations are providing medical practitioners easier access to capital and greater
bargaining power with insurance companies.

While the future is somewhat uncertain, the healthcare sector is expected to remain relatively robust because of an aging “Baby
Boomer” population and the expansion of health insurance increasing traffic to health care facilities. The following are three distinct
trends that we continue to see within hospitals, healthcare systems, surgery centers and physician practices.

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