A subsidiary of Bridge Investment Group, Bridge Office Fund Manager LLC, purchased One North LaSalle, a 47-story, 493,738-square-foot vintage office tower centrally located in downtown Chicago. Terms of the transaction were not disclosed, though the sellers—a joint venture of Northbrook-based Hilco Real Estate and two MB Real Estate executives—were reportedly shopping the property for $125 million.
The building is a talent hub for some of the area’s top tech, advertising and new media companies. Originally built in 1929, One North LaSalle also creates a premium investment opportunity due to a dwindling supply of creative office space in Chicago’s central loop with nearly 1.4 million square feet of vintage office converted to alternative uses since 2011. Holliday Fenoglio Fowler, L.P. (HFF) marketed the property on behalf of the sellers and sourced Bridge Investment as the purchaser.
One North LaSalle has undergone more than $35 million in capital improvements over the last decade and is currently 86.3 percent occupied. Recent renovations include a new full-service amenity floor known as The Landmark, which features a state-of-the-art fitness center, high-tech conference facilities, lounge areas and a rooftop deck and terrace. Average starting rental rates at the property have increased by nearly twenty percent since 2016.
Bridge, which already owns several office assets in the Chicago suburbs, is expanding its footprint to downtown amid a resurgence of demand for creative workspace in the Central Loop and neighboring submarkets, with vintage office rents spiking by nearly 40 percent since 2011. Bridge has closed on over 4.5 million square feet of office space nationally in 2018 alone, including the recent acquisition of O’Hare International Center in Rosemont. Their Chicago portfolio also includes Windy Point I & II in Schaumburg and 2300 Cabot Drive in Lisle.
“The purchase of One North LaSalle demonstrates our commitment to investing in office assets that are well-positioned, appeal to top talent and demonstrate exceptional rent growth fundamentals,” said Brian Tretinik, managing director of Bridge Investment Group. “The repurposing of existing office properties in the CBD for other uses has created a scarcity of creative office space sought by today’s workforce. One North LaSalle checks all the boxes for capitalizing on this opportunity, and we look forward to fostering a future-ready workplace poised for rapid growth in the years ahead.”
One North LaSalle offers convenient access to several nearby high-speed rail stations that serve more than 300,000 commuters daily. Tenants are also just a short walk away from premier dining and entertainment destinations such as House of Blues, Revival Food Hall, Chicago Theatre, The Dearborn and AMC Dine-In Theaters at Block 37. The property boasts a Walk Score of 98 and Transit Score of 100. One North LaSalle is listed in the National Register of Historic Places and is also featured on the Chicago Architectural Center’s walking tour. Leading tenants at the building include Prometric, Flanagan Bilton, Property Insight and Youth Guidance.
Office spaces ranging from 188 to 7,486 square feet are currently available, with a round of spec suites tentatively scheduled to deliver in 2019. Bridge Commercial Real Estate, the operating company for Bridge Office, will oversee the leasing which will be led by Melissa Rubenstein, Annie Nicolau, and Jay Miller of JLL. The HFF investment advisory team representing the seller included senior managing directors Jaime Fink and Jeffrey Bramson and directors Bryan Rosenberg and Patrick Shields.