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February 18, 2014

Coffee Is For Closers; The Deal Sheet

If anyone can “always be closing,” it's Marc Realty Residential. (Theymust have the Glengarry leads.) After snagging two value-add deals aroundthe holidays, the firm is kicking off 2014 with another pair of opportunisticprojects.

Principal David Ruttenberg (snapped with his son Solomon, he's not toointerested in coffee) tells us MRR paid $2.3M for 38 units and 10k SF ofretail at 4421-4439 W Fullerton in Logan Square. Retail space at the bank-owned property is fully leased (the Honduran consulate is a tenant, for thoselooking for a warm getaway) and the apartments are 25% vacant sinceownership lacked capital for upgrades. MRR plans to invest $750k incapital improvements and raise rents as units become available($900/month for a one-bedroom, $1,150/month for a two-bedroom). Theretail has seen little turnover, he adds, since the tenants are mainly localsmall business owners.

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At 1739-45 N Milwaukee in Bucktown, MRR just purchased the shell of anincomplete condo project for $2.1M. Using the original developer's plansof large condo units, they'll turn the $5M project into high-end rentals withretail on the ground floor. (The units are up to 3,000 SF and they'reconservatively underwriting rents between $2.25 and $2.75/SF.) The dealwas attractive due to its value-add mixed-use criteria, great location, andcondo upside and exit potential when the market turns (and it's not thereyet), David, partial to decaf iced Americanos, says. He's happy to sit on thesite at 8% yield on cost now, given the upside of appreciation and bettervalue for condos in five to 10 years.

As bank deals dry up, MRR is looking at ground-up development and

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As bank deals dry up, MRR is looking at ground-up development andvalue-add retail (think Fulton Market Kitchen at 311 Sangamon). “In 2009to 2011 value-add was about having access to capital,” David says. “Now it'sreally our market expertise that we need to leverage. In addition to someinvesting out of state and participating loans, MRR's biggest focus remainsvalue-add apartment deals using the multifamily savvy and neighborhoodknowledge of partner Chicago Apartment Finders. “We're turning as manywarehouses as we can close to city job centers into apartments,” he says.

2/19/2014 Coffee Is For Closers; The Deal Sheet - Real Estate Bisnow (CHI)

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The Deal Sheet

SALES

CBRE Hotels SVPs Nate Sahn and James Johnson repped the seller,Platinum Hospitality, in the sale of 66-rooom Comfort Inn & SuitesChicago South (above), 18400 Spring Creek Dr in Tinley Park. The buyer,a private investor, plans to retain the Comfort Inn & Suites franchise, whichreceived comprehensive renovations at the end of 2011.

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Kiser Group principal Lee Kiser and managing director John Meyer reppedthe seller in the $3.2M sale of Town Chalet, a 24-unit apartment complexat 422-44 Ridge in Wilmette. Senior managing director Sean Connellyrepped the buyer.

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NAI Hiffman EVP Eric Tresslar and VP Joe Bronson repped FirstIndustrial Realty Trust in the sale of 1850 Touhy Ave to BK Equities,repped by Colliers' Matthew Stauber. The 169k SF industrial property islocated SE of the Route 83 and Landmeier Road intersection in Elk Grove

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located SE of the Route 83 and Landmeier Road intersection in Elk GroveVillage. BK plans to keep the building (rather than building new) and leaseit to tenants in the O'Hare submarket.

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Kiser Group senior managing director Bill Baumann and managing directorMike Anguiano repped both sides in the $1.7M sale of a 24-unit apartmentbuilding at 4900-06 N Ridgeway in Albany Park.

LEASING

Arthur J Rogers & Co's Jeanne Rogers completed a 491k SF build-to-suitlease on behalf of DHL Global Forwarding near O'Hare. Lee &Associates of Illinois's Ken Franzese and John Cassidy repped ownership,and the $35M project recently broke ground. Scheduled for completion thisfall, the Global Forwarding Center will be DHL's largest facility in thecountry.

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NAI Hiffman EVP Steve Connolly repped Resource Plastics, relocatingfrom Blue Island, in a long-term 171k SF lease of industrial space at 5623 W115th St in Alsip with KTR Capital Partners (which recently redevelopedthe 400k SF property). The firm chose the location based on its proximityto customers and employees, rail service, and heavy electrical distributionfor the property. CBRE's Pete Robertson and Larry Johnson repped KTR.

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KBS REIT I signed 77k SF in new leases at its Woodfield Preserve OfficeCenter (above), a 610k SF complex at 10-20 N Martingale Rd inSchaumburg. IBM signed a 63k SF renewal and Merrill Lynch signed anew 14k SF lease. CBRE's Rob Graham and William Elwood reppedKBS; CBRE's David Justh and Ralph Gilbertson repped IBM; and CBRE'sDavid Saad repped Merill Lynch.

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Zoro Tools is relocating its HQ from 1000 Asbury Dr in Buffalo Grove to anearby 61k SF building at 909 Asbury Dr, within the Arbor Creek BusinessCenter. JLL SVP Steve Trapp, along with VPs Robin Stolberg and KurtSarbaugh, repped ownership, John Hancock Life Insurance Co andManulife Financial Corp, in the long-term lease. CBRE's Keith Puritzrepped Zoro Tools.

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Whole Foods Market signed a 45k SF lease to anchor the second phaseof The Mayfair Collection, HSA Commercial's mixed-use development at

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of The Mayfair Collection, HSA Commercial's mixed-use development atHighway 45 and Burleigh Street in Wauwatosa, Wis. The new Whole Foodswill be housed in a converted warehouse space, and plans for the secondphase of the development also include 50k SF of junior anchor retail space,a mix of upscale bars and restaurants, a bank branch, and a 140-roomhotel.

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NAI Hiffman VP John Whitehead repped COM2 Computer RecyclingSolutions in a full building industrial four-year lease for 208k SF at 500Kehoe Blvd in Carol Stream, near the firm's HQ at 140 E Fullerton. NAIHiffman EVP John Cash and VP David Haigh repped ownership, 500Kehoe LLC.

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Burrell Communications completed a long-term 35k SF renewal at 233 NMichigan Ave, part of the 2.1M SF Illinois Center complex. JLL's MonicaMoore, Nikki Kern, and John Beason repped the building owner,CommonWealth REIT. Studley's Joseph Lerner and Terry Mostromrepped Burrell. The building is managed by Reit Management & Research.

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MB Real Estate EVP Danny Nikitas, VP Dino Sepsis, and associateDoug Noble completed multiple office leases for tenants throughoutChicago: LTC subleased 9,250 SF at 250 S Wacker; GfK Holding signed a9,282 SF lease expansion at 420 N Wabash (Friedman Properties' RobertZimmerman repped ownership); Caldera Investment Group inked a 3,995SF lease at 401 N Michigan; Paulette Wolf Events signed a 3,176 SF earlyrenewal at 1165 N Clark; and Hudson leased 3,571 SF at 150 N Wacker.

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Hand & Stone Massage & Facial Spa signed leases in Geneva at 1416-AS Randall Rd in Randall Square shopping center (anchored by Bed Bath &Beyond and Old Navy) and in Kildeer at 20771 N Rand Rd in The QuentinCollection (anchored by The Fresh Market, Stein Mart, Best Buy, andDSW). Baum Realty Group principal and managing broker Allen Joffe andbroker Laura Haning repped the tenant.

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Bradford Allen Realty Services senior managing director Craig Nadbornerepped Perkins Eastman in a 9,000 SF renewal at 351 W Hubbard, wherethe firm has been a tenant since '05. SVP Bob Woods repped the landlord,Spectrum Properties.

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NAI Hiffman EVPs Michael Flynn and Dan O'Neill repped Bansley andKiener LLP in its lease restructuring and renewal for 9,869 SF of officespace within 111k SF O'Hare Plaza I, 8745 W Higgins Rd. JLL's RickBenoy repped ownership, Fulcrum Asset Advisors.

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CBRE VP Karen Walsh assisted Technical Maintenance in its lease of6,400 SF at 3248-3250 Forest View in Rockford

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YOU TELL US: ShouldFido Be Welcome?

Dogs seem as ubiquitous as interns in some officebuildings (though we haven't been as successful intraining the latter to fetch our coffee). We've alsoseen cats sprawled across lobby desks and Fluffyfaithfully trailing his owner in the supermarket'scanned food aisle. It's a common sight in tech andcreative strongholds, but is it a trend we shouldembrace? Or should owners leave their furryfriends at home? Tell us how pets impact you byclicking our survey.

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Has anyone found actual waterproof winter boots? We are sick of having wet feet and have yet to find appropriate footwear. Tellmarissa.oberlander@bisnow.com

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