Chicago-based Berger Asset Management closed the sale of the Tesla Sales/Service Center property at 1200 Old Skokie Valley Road, Highland Park, Illinois. B+E, an investment brokerage firm specializing in net lease real estate, represented Kam Development in the $8,750,000 acquisition, completing a 1031 exchange.
The property is a two-story building totaling approximately 52,000 square feet of space, of which the landmark tenant, Tesla, occupies approximately 32,000 square feet. Bystol Performance Center, a sports performance and personal training firm, is also a significant tenant in the building and occupies approximately 20,000 square feet.
In order to develop the property, Berger Asset Management first had to complete three different acquisitions from unrelated parties to form an assemblage that would ultimately create the existing asset—a 52,000-square-foot commercial structure and 140 parking spaces. The site originally was comprised of a series of buildings totaling 52,000 square feet and only 10 parking spaces. The building on the adjacent two-acre land site acquired for the additional parking had sat vacant and undeveloped for several years.
Over the course of two years, Berger Asset Management sought and received the necessary permits to develop the parking lot and rebuild the entire structure. Massive infrastructure and mechanical system improvements were necessary to make the building suitable for the unique needs of the tenants that now occupy space there.
“This was an interesting and dynamic redevelopment opportunity,” said Jonathan Berger, founder of Berger Asset Management. “While one of our original concepts was a self-storage development, the interest from and opportunity to work with Tesla ultimately made the most sense and created the most value for our investment.”
The Hawaii-based investor worked with B+E to find the off-market property using 1031Trade, B+E’s new trading platform for 1031 exchange buyers. The net lease retail property carries a cap rate of +/-6.8 percent with 5+ years of remaining lease term.
“B+E’s online platform used AI to sweep the national market and find an off-market net lease property that matched our buyer’s criteria,” said Spencer Henderson, a B+E broker. “Using 1031 Trade, buyers can quickly see nearly every deal currently on and off the net lease market and immediately place offers.”
The Equitable Group of Companies’ Joshua Silverglade represented Berger Asset Management in the transaction.