Office Asset Near O’Hare Lands $148M Refi

Presidents Plaza. Image courtesy of Newmark

Newmark has arranged a $147.5 million loan for the refinancing of Presidents Plaza, an 830,789-square-foot, two-building Class A office complex in Chicago’s O’Hare submarket. The property’s owners are Angelo Gordon and Glenstar Properties, and the loan was provided by Bank of America.

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Presidents Plaza is at 8600-8700 W. Bryn Mawr Ave., along the Chicago Transit Authority’s Blue Line running from downtown to O’Hare International Airport. The buildings were completed in 1979 and 1982 and are LEED Silver certified, according to CommercialEdge.

The property recently underwent a $20 million renovation and features a newly renovated lobby and adjacent lounge with a bar, pool tables and TVs, as well as a café, outdoor terrace and a full-service, professionally operated fitness center.

As a result of these amenities and its accessibility, the property reportedly has achieved significant rental premiums. Since the beginning of 2020, the sponsor executed several leases at rents substantially higher than previously achieved, according to Newmark.

The Newmark team was led by Jordan Roeschlaub and Dustin Stolly, vice chairmen and co-heads of Newmark’s New York Debt & Structured Finance team, along with Senior Managing Directors Chris Kramer and Nick Scribani, Director Eden Abraham and associate Ben Kroll.

Gradual improvements

The decline in Chicago-area office rents has flattened, and physical occupancy levels in office space have hit a peak since the pandemic’s start, at 27.5 percent, according to a second-quarter report from JLL.

Still, vacancy increased to 17.3 percent, despite sizable office leases from a variety of tenants, including several new to the Chicago market.

Class A office space in the O’Hare submarket had a total vacancy of 16.3 percent, on an inventory of 7.3 million square feet. The average direct asking rent stood at $37.03 per square foot, again according to JLL.

In June of last year, the pandemic notwithstanding, Glenstar nailed down a sizable lease expansion at its 1.1 million-square-foot Terraces at Solana, in Westlake, Texas. The tenant, Goosehead Insurance, increased the space on its headquarters there by 42,308 square feet, to a total of 150,454 square feet.