Posts Tagged ‘Illinois’
Tuesday, October 20th, 2009
The recession has thwarted real estate billionaire Sam Zell’s plans to raze the art deco, 80-year-old, 26-story 2 North Riverside Plaza building that housed the Chicago Daily News until 1960 and replace it with an office tower. Instead, Zell’s Equity Group Investments is beginning a multi-million dollar renovation of the building, which the advocacy group Preservation Chicago placed on its “Chicago Seven” list of endangered buildings in 2008.
The renovation includes basic fixes that appeal to prospective tenants, such as replacing old windows with energy-efficient ones and converting to electric heat from steam. Aesthetic improvements include cleaning the sphinx-shaped building’s limestone exterior and renovating the art deco lobbies with their metal decorations inspired by flowers.
Writing in the Chicago Tribune, Pulitzer Prize-winning architecture critic Blair Kamin expresses some disappointment in the building’s renovation plans, although he is pleased that the building is being saved for the time being. According to Kamin, “Another reason for disappointment is that the renovation will introduce generic design elements, like the curving, vaguely art deco light fixtures that will hang in the historic lobbies. And, as currently designed, the project will obscure dazzling, first-floor elevator-door decoration behind new walls meant to control pedestrian flow. Why bring back precious art deco decoration on one floor if you are going to hide it on another? Despite such faults, architecture buffs and historic preservationists should be pleased that they have won at least a temporary victory by staving off either a demolition or defacement of 2 North Riverside.”
Tags: architecture, design elements, energy efficient, historic presrvation, Illinois, landmark, recession, renovation, Sam Zell
Posted in Development, Office | No Comments »
Thursday, July 16th, 2009
At a time when real estate assets are moving slowly, other areas are being eyed for opportunity plays. Bond salesman Thomas Ricketts had just about closed his bidding group’s purchase of the Chicago Cubs from the Chicago Tribune. Documents relating to the fully financed transaction were sent to Major League Baseball over the 4th of July weekend in a deal said to be worth between $850 million and $900 million.
The Tribune, which is under Chapter 11 bankruptcy protection, jump started the Ricketts family by renewing negotiations with rival bidders after the deal stalled over a disagreement about the value of the Cubs’ broadcast contracts. Major League Baseball, the Cubs’ creditors and the Delaware judge overseeing the Tribune’s bankruptcy case still must sign off on the sale.
Then, New York investor and former Chicagoan Mark Utay threw a monkey wrench into the Ricketts deal. Utay, who is a managing partner with Clarion Capital Partners, LLC, is said to be offering a higher – though undisclosed – amount of money for the Cubs, though with less upfront cash than the Ricketts deal.
The Ricketts bid features an estimated $450 million financed with debt, with the remainder paid in cash by the Ricketts family, who are the founders of TD Ameritrade, Inc. The Tribune wants the sale to be partially financed with debt to limit its exposure to capital gains taxes. Once the final details are worked out, the Tribune will retain a five percent stake in the Cubs. Wrigley Field and a 25 percent stake in Comcast SportsNet are included in the package.
“I don’t think it’s completely over yet,” said a source close to the negotiations, who asked not to be identified because the sale process is continuing. “By the same token, Ricketts has a real edge here.” A Major League Baseball source and a second individual familiar with the sales process said the draft agreement with Ricketts has been submitted for league review. Nothing has been sent in for Utay, according to the league source. Both sources said the Tribune is telling the Ricketts family that only its bid will be submitted to the court and Major League Baseball.
Just this week, the Tribune threw a curveball by suggesting that it might take the Cubs through a fast, pre-packaged bankruptcy that would protect its future owner from its creditors.
Tags: Chapter 11 bankruptcy protection, Chicago, Chicago Cubs, Chicago Tribune, Clarion Capital Partners LLC, Comcast SportsNet, Cubs' creditors, debt, Delaware judge, Illinois, Major League Baseball, Mark Utay, New York investor, real estate assets, Ricketts family, TD Ameritrade Inc, Thomas Ricketts, Tribune's bankruptcy, Wrigley Field
Posted in General | No Comments »
Wednesday, July 15th, 2009
Economic development organizations are stepping in to help plug the credit hole. We all know what the economy is like today, and it is unlikely that the industrial and commercial real estate markets will soon turn around. As an
economic developer, I see another side of the economy where both communities and businesses are seeking opportunities and looking at alternatives ways to secure capital.
Aside from the federal stimulus incentives, municipal, state governments and educational institutions offer a variety of incentives to encourage businesses to remain in their jurisdictions. Here’s an example:
I am currently working with a printer, a cutting-edge small business with Fortune 500 customers, to preserve more than 100 good-paying jobs in a small municipality. The company’s primary obstacle: borrowing money for new equipment and other capital improvements. The deal requires $1.5 million, all of it collateralized. Because the company was in financial straits, an angel investor recently purchased the company and is investing heavily. Even with this influx of new capital, lenders consider the company a high risk. To make the deal happen, we are using state, county and municipal revolving loan funds to underwrite $750,000 of the project to add to the $750,000 conventional bank loan. The lender has virtually no exposure and has first position on all assets, including building and land that are free and clear of debt.
A key player in putting the deal together is the Illinois Department of Commerce and Economic Opportunity’s Participation Loan Program, one of the few available state incentives until Illinois adopts a capital budget. For more information about the program, contact Stanley Luboff, Capital Programs Manager at stanley.luboff@illinois.gov.
Chris Manheim is our guest blogger. He is the President of Manheim Solutions, Inc., a consulting firm specializing in community, workforce and small business economic development programs.
Tags: bank loan, capital budget, Chris Manheim, commercial real estate, credit, debt free, economic developer, economic development, educational institutions, federal stimulus, financial straits, Fortune 500, Illinois, Illinois Department of Commerce and Economic Opportunity's, Industrial, industrial real estate, Manheim Solutions, municipal, Participation Loan Program, revolving funds, secure capital, Stanley Luboff, state government, underwrite
Posted in Development, Economics, Financing, General, Green, Healthcare, Residential, Student Housing | No Comments »
Friday, June 12th, 2009
Apple may be the Great American Company — the heir to the spirit of Henry Ford who revolutionized corporations worldwide by modernizing the assembly line to facilitate production of his legendary Model T car. Similarly, Apple under Steve Jobs’ leadership expresses everything that Americans naturally do well — innovation, high quality, smart growth, and nimbleness.
The recession and credit crisis are not slowing Apple, Inc.’s growth as the firm announced plans to open 25 new stores worldwide this year. Two of the new stores are in the Chicago area – one a 15,000 SF boutique in the city’s Clybourn Corridor and another in 42,000 SF in west suburban Naperville.
Apple’s balance sheet is firmly in the black, and the firm employs 35,000 individuals globally. After 30 years, the firm’s brand personality is still groundbreaking, sleek and cool. Think how the iPod changed the music business and the iPhone has redefined the P.D.A.
Apple’s culture of collaboration is legendary (the ipod, for example, was created by 4 people under the aegis of Steve Jobs) with a belief in also fostering individuality that draws very talented people. To recognize its top employees, Apple created the Apple Fellows program for those who have made extraordinary technical or leadership contributions to personal computing while at the company. The Apple Fellows include Bill Atkinson an and Steve Capps (two of the creators of the Mac), Guy Kawasaki (marketing guru and legendary blogger) Al Alcorn (one of the brains behind Atari), and Don Norman (cognitive scientist and usability expert). All that talent has translated to a product that is still peerless in its reputation. According to surveys by J. D. Power. Apple has the highest brand and repurchase loyalty of any computer manufacturer worldwide.
It is ironic that Apple’s rejuvenation comes during a time when the automakers – the symbol of the primacy of the American corporate model – have seen their fortunes tumble because of antiquated systems, an ossified culture and diluted brands. As they emerge from Chapter 11, there are few better companies to study than Apple – a firm that Henry Ford would have been proud of.
Tags: Apple, Apple Inc, balance sheet, brand, Chicago, Clybourn Corridor, cool, corporate model, credit crisis, culture, Great American Company, Henry Ford, high quality, Illinois, iPhone, iPod, Model T car, modern, modern culture, music, Naperville, nimble, PDA, recession, rejuvenation, sleek, smart growth, Steve Jobs, west suburan
Posted in General | 1 Comment »
Friday, June 5th, 2009
The opening of the new Modern Wing of the Art Institute of Chicago spurred me to finally trek out to the other great piece of museum architecture in the Midwest, Santiago Calatrava’s Quadracci Pavilion, a sculptural addition to the Milwaukee Art Museum which opened in 2001, and cost approximately $121 million. The museum initially hired Calatrava to design a 58,000 SF addition to the existing Eero Saarinen and David Kahler buildings in 1994. When fundraising exceeded all expectations, the scope of the project was expanded to 142,000 SF, increasing the gallery space by 30 percent. It was Calatrava’s first building in the U.S.
In many ways, the Quadracci is a perfect counterpoint to Piano’s Art Institute. Where the latter is Prairie-style 
horizontal, a symmetrical glass and limestone box that sinks into the earth, Calatrava’s is an expressionist sculpture that ascends and twists into the lakefront air. The signature Calatrava move (similar to his El Alamillo Bridge in Seville) is the pair of beautifully articulated wings that frame the new building, called the Burke Brise Soleil. With a wingspan rivaling a Boeing 747 and weighing 90 tons, they open and close with the museum (and also with the ebb and flow of the wind load). But Calatrava’s greatness is that his wings aren’t merely wings — they are part of a vocabulary of organic shapes that converse with Lake Michigan, echoing waves and stingrays and even skeletal shapes. “The project responds to the culture of the lake: sailboats, the weather, culture, the sense of motion and change,” he said.
For all the splendor of the wings, the arrival on the inside may be the architect’s greatest reach — the Cathedral-like entry, the Windhover Hall, that recalls everything from Gothic to Antoni Gaudi’s unfinished Sagrada Familia in Barcelona — complete with flying buttresses, vaulted ceilings and a nave shaped like a prow that extends into Lake Michigan. Like Piano, Calatrava is reaching back to the scared origins of art and expression to create a building that cloaks its exhibits in silence and suggestions of ancient ritual.
Calatrava has several other U.S. projects on the boards, including the Atlanta Symphony Center, 80 South Street in New York (a residential tower), the World Trade Center Transportation Hub in New York and the Trinity River Bridges in Dallas.
According to statistics provided by the Milwaukee Art Museum, attendance the year the Calatrava wing opened soared from 165,285 in 2000 to 373, 578 in 2001. The peak year was 2002, when 538,764 people visited the museum. Attendance was up in 2007 nearly 80 percent from 2000 – the year before the addition opened – but down about 45 percent from the year after the addition opened.
Tags: architecture, Art Institute, Art Institute of Chicago, Burke Brise Soleil, Calatrava, Calatrava wing, Cathedral-like, change, culture, Dallas, David Kahler, Eero Saarinen, El Alamillo Bridge, expressionist sculpture, gallery, gallery space, Gothic, Illinois, Lake Michigan, lakefront, limestone box, Midwest, Milwaukee Art Museum, motion, new building, new Modern Wing, New York, organic shapes, Piano's Art Institute, Prairie-style, project, Quadracci, Sagrada Familia, sailboats, Santiago Calatrava's Quadracci Pavilion, sculptural addition, Seville, signature Calatrava, skeletal shapes, symmetrical glass, Trinity River Bridges, weather, Windhover Hall, wings, World Trade Center Transportation Hub
Posted in General, Healthcare | No Comments »
Monday, May 18th, 2009
Even during a steep recession, the demand for the right niche product like student housing remains strong 
because people know they need education and training to compete effectively in a fast-shrinking job pool. At a time when universities have seen their endowments and investment revenues decrease because of the state of the equity markets, private-sector developers have recognized this need and are taking the opportunity to diversify their portfolios by developing institutional-grade student residences in prime locations.
We are now seeing the largest generation in 50 years, the 78 million echo boomers (born between 1982 and 1985) flooding the higher education system. The Alter Group’s initial response to the critical need for upscale downtown Chicago student residences is Fornelli Hall, a $45 million transformation of eight floors within the historic Pittsfield Building. Profiled in a recent issue of University Business magazine online, Fornelli Hall opened for business last fall with signed master ground leases for 350 beds with Roosevelt University and Robert Morris College.
Tags: echo boomers, education, equity market, Fornelli Hall, higher education system, Illinois, job pool, Pittsfield, Pittsfield Building, private-sector developer, recession, Robert Morris College, Roosevelt University, Student Housing, student residences, training, universities, upscale downtown Chicago
Posted in Development, Residential, Student Housing | No Comments »
Tuesday, April 28th, 2009
Is wine recession proof?
Business obviously is good for one retail sector niche market. Chicago-based Binny’s Beverage Depot is taking over a shuttered Circuit City store in west suburban Downers Grove and plans to convert it into their 23rd location.
Binny’s purchased the 31,000 SF big-box store, located at the intersection of Highland Avenue and Butterfield Road near I-88, for a bargain $3,000,000. The renovated building will feature an Italian deli, a bakery, a cooking demonstration area, a walk-in cigar humidor and a well-stocked wine bar.
The expansion-minded, family owned chain recently opened its 22nd store in northwest suburban Algonquin. (You caught at glance of a Binny’s in “The Dark Knight”, which was shot in Chicago.)
With millions of square feet of big-box space now on the market following the demise of retailers such as Circuit City and Linens ‘n’ Things, this is the sort of adaptive reuse the market needs.
Tags: big box store, Binny's, Chicago, Circuit City, Downers Grove, I88, Illinois, Linens n Things, northwest suburb, west suburban, wine, wine bar
Posted in Development | No Comments »
Tuesday, March 17th, 2009
One of Chicago’s most visited real estate icons — and the Western Hemisphere’s tallest building — is getting a new name. And Chicagoans are not thrilled.
Under the terms of a significant lease signed by global insurance broker Willis Group Holdings, Ltd., the 110-story, 1,450-foot-tall Sears Tower will change its name to the Willis Tower.
The London-based insurance giant plans to move nearly 500 Chicago-based associates into the trophy building, initially occupying more than 140,000 SF on multiple floors. Located at 233 South Wacker Drive, the 3.8 million SF Willis Tower was designed by Chicago architects Skidmore, Owings & Merrill. The Sears Tower has not occupied the building, which was completed in 1973, since its move to Hoffman Estates in 1992.
At $14.50 PSF, the lease provides a glimpse of how the recession has negatively impacted office rents. Net rents for existing Class A West Loop space have dropped to about $21 PSF from $25 PSF a year ago. Sears – uh, Willis — Tower rents tend to be lower because some potential users fear its September 11 factor. The building’s owner is 233 S. Wacker LLC. U.S. Equities Asset Management, LLC, provides leasing and management services.
According to an unscientific poll in the Chicago Tribune, 95.7 percent of respondents say they will always call the building the Sears Tower. Just 4.3 percent plan to use the new name. Sears may have moved to Hoffman Estates years ago, but it’s still a hometown company.
Tags: Chicago, class A office building, Illinois, Sears Roebuck Company, September 11, Skidmore Owings Merrill, The Sears Tower, US Equities Asset Management, West Loop office submarket, Willis Group Holdings, Willis Tower
Posted in Office | No Comments »
Thursday, March 12th, 2009
Contrary to popular perceptions, significant CBD office leases are still being signed, recession or no recession.
A case in point is KPMG LLP’s recent inking of a 15-year lease for 260,000 SF in the Aon Center at 200 East Randolph Street in the prized East Loop market. The accounting and advisory firm will relocate its 1,700 employees from 303 East Wacker Drive in August of 2012 when the lease takes effect. 
The space on floors 53 through 61 will be vacant after law firm Kirkland & Ellis LLP moves to its new tower at 300 North LaSalle Street later this year. Considering that the downtown Chicago office market experienced 200,000 SF of negative absorption during the fourth quarter of 2008, this is encouraging news indeed.
Part of the story is that the East Loop office market has fared relatively well through the recession, and experienced 500,000 SF of positive absorption last year. It’s currently an extremely affordable market, with asking lease rates in the Aon Center at about $20 per square foot net.
Tags: Chicago, East Loop, Illinois, Kirkland & Ellis LLP, KPMG LLC
Posted in Office, Student Housing | No Comments »
Friday, February 27th, 2009
Denny’s, the one-time king of value restaurants, recently tried to regain some of its lost glory by offering a free Grand Slam breakfast to everyone who showed up during limited morning/early afternoon hours. The $5.99 Grand Slam breakfast includes two eggs, two bacon strips, two sausages and two pancakes.
More than 2,000,000 people took advantage of the offer. Denny’s promotion, which cost about $5 million in food, labor and Super Bowl advertising, received $50 million in free publicity. The move wasn’t entirely altruistic, though. Sales at Denny’s franchise restaurants open for more than one year had fallen 7.2 percent at a time when the chain thought its business should be better.
Generous giveaways also are happening in commercial real estate. Our property and facility management affiliate, Alter Asset Management, recently renewed its lease of its own office space at Oak Creek Center in Lombard, IL, with the building’s owner, SMII Oak Creek. The lease incorporates significant financial incentives, including a rent reduction, a five-month gross rent abatement, and a generous TI allowance to modernize and enhance the space. The office will receive new carpeting; repainted walls; an updated conference room and reception area; and some new furniture. Alter Asset Management is getting a terrific deal out of this lease renewal – and they aren’t spending a single cent on the renovations.
That’s one effective tenant-retention program, particularly in this recessionary economy. It’s clearly a tenants’ market, and building owners are eager to make concessions to keep the rent money flowing.
Tags: commercial real estate, Denny's, financial incentives, free Grand Slam breakfast, Illinois, Lombard, Oak Creek Center, promotion, TI allowance
Posted in Economics | No Comments »