Against prevailing industry trends, a local investor has acquired a distressed office building near Chicago O’Hare International Airport for less than $30 million.
This purchase was led by Gene Staples, who secured the International Tower office building at 8550 West Bryn Mawr Ave. from an entity connected with Bridge Investment Group, as reported by Crain’s Chicago Business. Bridge had provided a loan of $43.4 million to the previous owner, Golub, in 2019 and assumed control of the property in 2022.
The price of this transaction represents a significant drop from the $40.3 million Golub paid for the International Tower in 2014. The property’s appeal waned last year when Advocate Aurora Health announced its intention to vacate its five-floor call center space upon the expiration of its lease in October, according to Crain’s.
Excluding Advocate’s space, the building is currently 55% leased, with an average lease term of approximately seven years. The largest tenant in the building, occupying roughly 45,000 square feet, is the food service company Newly Weds Foods.
It’s no secret that the national office market is grappling with challenges. The overall availability rate has reached 24.4%, a 40 basis-point increase from Q1 and available sublease space has reached an all-time high of 176.2 million square feet, as per a recent report by Savills.
The regional numbers are hardly better.
As for the acquisition of 8550 West Bryn Mawr Ave., Crain’s reported Staples may be banking on a recent trend of office buildings near the airport outperforming the rest of the suburban market. According to JLL, the vacancy rate among office buildings close to the airport stands at just under 24%, notably lower than the 28.9% average across all suburbs.
