This month I’m going to offer a two-part series. Both articles will examine the advantages of leveraging the expertise of a commercial broker for commercial real estate transactions. This first article will cover the benefits of a commercial broker from a seller’s perspective; I’ll follow up in part two with a look at the benefits from a buyer’s point of view.

Before we delve into the many reasons why using the services of a commercial broker is a good idea for anyone looking to sell commercial real estate, let me just make a few general comments …

 

Commercial real estate is truly a specialty. A commercial real estate transaction is a complex undertaking that involves thousands of details and interrelated tasks. It can be very difficult for someone without a thorough knowledge of the commercial real estate business to manage a transaction efficiently and without missing details that would result in unnecessarily wasted time and money. The commercial real estate industry, along with all of the rules and regulations that govern it, is very dynamic. Things can change so quickly that even seasoned professionals can fall behind if they are not diligent about staying current.

I sometimes compare commercial brokers to attorneys. When people (that are not legal professionals) have legal issues, they could try to represent themselves, but it’s not a good idea. Without the vast knowledge and understanding of the minute details that a qualified attorney possesses, there’s a high probability that details could be overlooked and costly mistakes be made. Good attorneys know the most current laws and the smartest strategies and tactics for addressing legal issues. An attorney is an expert consultant for legal issues, and a commercial real estate broker is an expert consultant for real estate transactions.

A commercial broker can represent buyers, sellers, landlords and tenants. So let’s take a look at what a broker can do for sellers.

One of the most important benefits that a reputable broker offers a seller is effective marketing. Obviously, when sellers list properties, they need to get the word out to viable buyer prospects. This is how they reach the best prospects and they get the best price for the property. Unlike most property owners, quality brokers have a wide variety of marketing tools and resources at their disposal and the expertise to use those tools to maximize the exposure of the property to the target audience most likely to be interested in buying. Because a broker has these tools in place and uses them often, he or she will be able to run each marketing campaign efficiently and cost effectively. Marketing for-sale properties is something most brokers do practically every day, so the process usually runs like a well-oiled machine. Once the seller submits the details of the property, the broker will have it in the MLS system, on multiple internet real estate sites, and in all the right print publications almost immediately. In most cases, signs, flyers, email blasts, direct mail and other communications channels will also be used to enhance the campaign. In addition to the standard marketing channels, if a broker has been working in the area for an extended period of time, he or she has probably built up a network of relationships with clients, investors and other brokers that will result in some excellent leads.

An experienced broker may also have the talent and ability to look at the property from different perspectives and recognize variables that the owner didn’t notice. A broker can frequently help the seller identify the highest potential for the property based on factors such as location, square footage, property type and more. For example, a property near the hospital may have the most value as a medical facility. A building near the courthouse may be ideal for an attorney’s office. A specific example in Wilmington is on the corner of Oleander Drive and Independence Boulevard. Remember the old Exxon station? Today it’s a thriving Starbucks. It’s on the corner of a busy, high-visibility intersection that’s easily accessible from either side, and near business and residential areas – it’s the perfect spot for a Starbucks.

Proactive commercial real estate brokers also will offer sellers ideas about the best way to utilize their properties. Understanding the variety of ways a particular property can be split or subdivided can expand the appeal of the property to a broader audience. A good broker will run scores of analytics to determine the true value of the property for a range of business scenarios, and then find the appropriate target buyers.

The bottom line is, a commercial real estate broker is a specialist that has the tools, knowledge and connections to help sellers locate buyers efficiently and cost effectively.

Continue reading “The Benefits of a Broker In Commercial Real Estate (Part 1 of 2)”


 A California real estate investment firm bought a Naperville office complex for $18 million, 29 percent less than the property's pre-recession price in 2007. Irvine, Calif.-based Sperry Equities bought Washington Commons, an approximately 200,000-square-foot office complex on Diehl Road, according to DuPage County records. The deal comes nine years after the complex sold for $25.2 million, before the recession hammered suburban values. In many cases values have never fully recovered. Although the property's value remains below pre-crash levels, Sperry believes it can cash in on the lowest suburban office vacancy in 14 years, allowing it to charge higher rents than those in deals signed in the past few years. Suburban vacancy was 18.5 percent to end 2015 and 18.6 percent in the western part of the east-west corridor, according to Chicago-based Jones Lang LaSalle. “They bought it in 2007 at the peak,” said Burton Young, a Sperry Equities principal. “Rents haven't recovered to where they were in 2007, but we believe we can capitalize on market timing. There are some rents there that are low relative to the market, and there's room to increase the occupancy. We think it's a market-timing play.” The seller was a Denver-based venture of real estate investment firm EverWest Real Estate Partners and real estate investment trust Dividend Capital Diversified Property Fund. EverWest was known as Alliance Commercial Partners at the time of the deal. Alliance lost a few other suburban buildings to foreclosure during the downturn. The Alliance venture that bought Washington Commons faced a potential loan default on the complex in 2011 because of rising vacancy, according to a Bloomberg loan report. But the owners later that year negotiated a maturity extension of four years, to February 2016, on the $21.3 million securitized loan, according to Bloomberg. The Alliance venture also made a $4 million equity contribution and split the loans into A and B notes as part of the 2011 modification, according to the loan report. EverWest, which changed its name in 2014, and Dividend Capital representatives did not return calls requesting comment. Washington Commons, at 450-500, 550-700 and 750-900 E. Diehl Road, consists of 10 single-story buildings connected by foyers and hallways, on 21 acres, Young said. The complex was 77 percent leased when Sperry Equities struck the deal to buy it, and several small new leases have boosted occupancy to about 85 percent, he said. The largest tenants are a regional headquarters of Toyota's Lexus division, with 31,000 square feet, and a 17,000-square-foot Bright Horizons daycare, Young said. Sperry Equities, once affiliated with brokerage Sperry Van Ness but now independently owned, plans upgrades including building out move-in-ready suites, he said. “We love Naperville and the surrounding area," Young said. "It's a good long-term hold right off the I-88 tollway and Diehl Road.” Sperry Equities owns about 6 million square feet of commercial real estate, including office and industrial space in Bolingbrook, Hoffman Estates and Tinley Park, Young said.
Naperville Office Complex Sells for $18 Million

A California real estate investment firm bought a Naperville office complex for $18 million, 29 percent less than the property’s pre-recession price in 2007.

Irvine, Calif.-based Sperry Equities bought Washington Commons, an approximately 200,000-square-foot office complex on Diehl Road, according to DuPage County records.

The deal comes nine years after the complex sold for $25.2 million, before the recession hammered suburban values. In many cases values have never fully recovered.

Although the property’s value remains below pre-crash levels, Sperry believes it can cash in on the lowest suburban office vacancy in 14 years, allowing it to charge higher rents than those in deals signed in the past few years.

Suburban vacancy was 18.5 percent to end 2015 and 18.6 percent in the western part of the east-west corridor, according to Chicago-based Jones Lang LaSalle.

“They bought it in 2007 at the peak,” said Burton Young, a Sperry Equities principal. “Rents haven’t recovered to where they were in 2007, but we believe we can capitalize on market timing. There are some rents there that are low relative to the market, and there’s room to increase the occupancy. We think it’s a market-timing play.”

The seller was a Denver-based venture of real estate investment firm EverWest Real Estate Partners and real estate investment trust Dividend Capital Diversified Property Fund.

EverWest was known as Alliance Commercial Partners at the time of the deal. Alliance lost a few other suburban buildings to foreclosure during the downturn.

The Alliance venture that bought Washington Commons faced a potential loan default on the complex in 2011 because of rising vacancy, according to a Bloomberg loan report. But the owners later that year negotiated a maturity extension of four years, to February 2016, on the $21.3 million securitized loan, according to Bloomberg.

The Alliance venture also made a $4 million equity contribution and split the loans into A and B notes as part of the 2011 modification, according to the loan report.

EverWest, which changed its name in 2014, and Dividend Capital representatives did not return calls requesting comment.

Washington Commons, at 450-500, 550-700 and 750-900 E. Diehl Road, consists of 10 single-story buildings connected by foyers and hallways, on 21 acres, Young said. The complex was 77 percent leased when Sperry Equities struck the deal to buy it, and several small new leases have boosted occupancy to about 85 percent, he said.

The largest tenants are a regional headquarters of Toyota’s Lexus division, with 31,000 square feet, and a 17,000-square-foot Bright Horizons daycare, Young said.

Sperry Equities, once affiliated with brokerage Sperry Van Ness but now independently owned, plans upgrades including building out move-in-ready suites, he said.

“We love Naperville and the surrounding area,” Young said. “It’s a good long-term hold right off the I-88 tollway and Diehl Road.”

Sperry Equities owns about 6 million square feet of commercial real estate, including office and industrial space in Bolingbrook, Hoffman Estates and Tinley Park, Young said.

Source: Chicago Real Estate Daily Ryan Ori April 7th, 2016

biggest suburban chicago apartment deal in 18 months
Stonebridge of Arlington Heights is a 586-unit apartment complex.

Biggest Suburban Chicago Apartment Deal in 18 months
An Ohio landlord on the hunt for apartments here has pulled off the biggest multifamily acquisition in the Chicago suburbs since September 2014.

Ventures led by Connor Group, based outside Dayton, paid $105 million, or about $179,000 a unit, last month for Stonebridge of Arlington Heights, a 586-unit complex in northwest suburban Arlington Heights, according to a deed filed with Cook County. It is the third acquisition in 18 months in the Chicago suburbs for Connor, which owns 14,000 apartments in the eastern half of the country.

Connor is expanding its presence in a strong suburban apartment market that shows few signs of weakening in 2016 amid steady job growth and a continued preference for renting over owning among many suburbanites. The median net suburban rent rose nearly 4 percent last year, with similar increased expected in 2016, according to Chicago-based consulting firm Appraisal Research Counselors.

Rents have been rising since 2009, about when Connor started shopping for apartments here. The firm made its first acquisition in September 2014, when it paid $61.8 million for Glenmuir, a 321-unit property in Naperville. About a year later, it completed its second deal, paying $62.1 million for Alara at Summerfield, a 368-unit complex in Aurora now called Aurora at Summerfield.

Chicago is “a big market, there are a lot of renters by choice and the submarkets we’re in are highly desirable,” said Connor Partner Pat Rini.

Connor acquired Stonebridge from its longtime owner, a venture led by local investor Maria Magnus, who did not return calls. Connor financed the acquisition with a $78.7 million loan from Freddie Mac, count records show.

The Stonebridge deal is the biggest sale of a suburban Chicago apartment complex since September 2014, when Woodland Creek, a 640-unit property in Wheeling, sold for $118.5 million.

Rini said a confidentiality agreement prevented him from discussing the transaction but not the Chicago apartment market or Connor’s plans for the Arlington Heights property.

Stonebridge, at 600 W. Rand Road, is a so-called value-add acquisition for Connor, which plans to spend $6 million on a major interior and exterior renovation, Rini said. The firm is revamping the apartments with new countertops, appliances, flooring and other improvements, he said. The project will allow Connor to charge higher rents and ultimately boost the value of the property.

Built in 1975 and last renovated in 2011, Stonebridge is considered a Class C property, with rents ranging from $1,250 a month for a one-bedroom apartment to $1,480 for a two-bedroom, according to an Appraisal Research report. Rents have held roughly steady over the past year or so, at $1.34 per square foot, the report says.

Connor is being patient in its search for apartments here, but it ultimately could end up with another half-dozen properties here, possibly even some downtown, Rini said. To achieve scale, the firm aims to own six to 10 properties in each of its markets, enough to cover the cost of a local office and other operations.

“We’ll get there,” he said. “I don’t know if it will be sooner or later, but we’ll figure it out.”

Source: Chicago Real Estate Daily, Alby Gallun April 6, 2016

SOLD!

1660 Glen Ellyn Rd Glendale Heights, IL 60139

 Glendale Heights Office Building Sold

Glendale Heights, IL – Randolph Taylor of Coldwell Banker Commercial NRT – Chicago has successfully brokered the sale of a Free-standing single story 3,612 sf office building at 1660 Glen Ellyn Rd in Glendale Heights, IL  near Adventist Glen Oaks Hospital minutes from the I-355 tollway. The property was vacant at the time of sale purchased by a local Dentist and will be converted to a Dental office. The property sold for $422,000

Coldwell Banker Commercial

Coldwell Banker Commercial NRT has the largest commercial real estate footprint with over 3,500 professionals nationally, over 16,000 listings, nearly double that of the nearest competitor, averaging 13,000 transactions annually valued at over $4 Billion. Providing comprehensive Commercial Real Estate Services to the Greater Chicago Area and Nationally through our vast network of over 3,500 professionals and Global Client Services team.

Randolph J. Taylor MBA, CCIM, Broker is a  seasoned Commercial Real Estate Broker with over 16 years of commercial real estate sales, leasing, asset management and investment experience. Providing comprehensive Commercial Real Estate Services to the Greater Chicago Area and Nationally through our vast network of over 3,500 professionals and Global Client Services Group.

1717 Park St

Naperville office building sells for 5.7 million

A 114,016-square-foot office building in Naperville owner Omaha, Neb.-based Quarter Circle Capital LLC sold for more than $5.7 million. DuPage County records show the buyer of the property at 1717 Park St. was a venture of a Farida Tazudeen, a local real estate investor who could not be reached. The venture financed the Jan. 15 purchase with a $4 million loan from New York-based Garrison Realty Finance LLC, according to county records. It was the last remaining building owned by an approximately eight-year-old fund that also had included 1755 Park, which previously sold for $2.5 million to Riverwoods-based Podolsky Circle CORFAC International, Quarter Circle Principal John Martin said.  A Podolsky venture also agreed to buy 1717 Park, but Quarter Circle sued the venture in December, saying it failed to close on the deal. The lawsuit is still pending, Mr. Martin said.

Source: Chicago Real Estate Daily January 28th, 2014