Riverway transit-oriented office buildings for sale near Chicago

Thursday, June 23, 2016

Update: This property is no longer available. HFF closed the sale of it in 2016. 

On behalf of the owner, HFF is marketing Riverway, a portfolio of office buildings for sale in the Chicago-area community of Rosemont. The investment opportunity includes a collection of three, Class A, suburban, transit-oriented, trophy office buildings, a Bright Horizon’s daycare facility and three parking garages totaling 869,120 square feet. The property’s attributes make it an ideal office complex and one that has never before been offered for sale on a standalone basis.

The properties for sale are currently 95 percent leased with a weighted average remaining lease term of 5.4 years, making this trophy investment opportunity one of the top assets in the entire Chicago market. Featuring diversified income stability, the commercial buildings for sale are home to a diverse rent roll of 20 tenants in the food services, pension fund, market research, logistics, water treatment, industrial supply and government sectors. Seventy-five percent of the GLA consists of company headquarters, including those for U.S Foods, Culligan International and Appleton Group. Excluding the long-term anchor tenancy of U.S. Foods and Central States Pension Fund, no single tenant occupies more than 6.1 percent of the GLA.

Geographically situated at the center of metropolitan Chicago, Riverway is located within Rosemont, Illinois, which serves as a hub to the major communities of Chicago and as a gateway to the city. Riverway is situated at the junction of two of metro Chicago’s most vital arteries, Interstate 90 and Interstate 294, providing convenient and direct access to the region’s network of roadways. Additionally, Rosemont is a walkable, vibrant, mixed-use environment attracting nearly 100,000 daily visitors, and Riverway is within a one-mile radius of more than 25 restaurants, 12 hotels and a multitude of entertainment, theater and retail space. Riverway has all the aspects today's demanding office tenants desire in an urban office property.

Office Building Investment Benefits

  • Unrivaled Connectivity:  Riverway benefits from the combination of prime central location and immediate proximity to a robust transportation infrastructure. Rosemont is equally serviced by the CTA and Metra; the CTA Line Stop, about a five-minute walk from the investment opportunity, is one of the most used in the entire CTA rail network, and the Blue Line provides convenient direct service to O’Hare International Airport, downtown Chicago and Chicago’s western neighborhoods. Additionally, popular urban neighborhoods such as Bucktown, Wicker Park and the West Lop are a short commute from Rosemont via the Blue Line. Serviced by the Metra North Central Service Line, the Rosemont Metra Station is less than a five-mile drive from the property and provides a direct link to the highly-desirable executive housing areas within Chicago’s northwest suburbs.
  • Class A Transit-Oriented Vacancy:  With employers trying to entice new talent, Riverways’ connectivity provides employers unique access to deep labor pools across both urban and suburban communities. Accordingly, growing tenant demand continues to favor best-of-the-best transit-oriented properties, driving significant vacancy compression among the competitive subset of Class A office assets situated within a half-mile radius of both Cumberland and Rosemont CTA stations to a vacancy rate of 6.2 percent, while overall market Class A vacancy is at 11.8 percent. Furthermore, only a single continuous block of Class A 100,000-plus rentable square feet remains available within the entire O’Hare area.
  • Institutionally-Maintained Property:  The property has been institutionally maintained, ensuring the continued desirability of Riverway to attract more Fortune 500 tenants in the future. The ownership has invested more than $3.5 million in capital in Riverway since 2012, elevating the appeal, professional appearance and unparalleled on-site amenities offered by the property.
  • Best-of-the-Best Rent Growth:  Since 2011, rents at Riverway have grown an astounding 26 percent. Record-high replacement costs paired with record highs for replacement rents have created an all-time high spread between Class A rents and new construction rents. This spread, coupled with the ability to make strategic cosmetic improvements, will ensure the continued trend of rent growth at Riverway going forward. The commercial property for sale has been a case study for how best-of-the-best buildings in best-of-the-best locations have consistently been able to increase rental rates in recent years. With continued compression of Class A market vacancy, a lack of competitive development sites and replacement rents north of $29 per square foot net, Riverway is expected to benefit from sustained tenant demand and continued rent growth.

Riverway offers an investor the once-in-a-lifetime opportunity to acquire a trophy office project located at a transportation hub that has never before been offered for sale on a standalone basis. For more information on this or other office buildings for sale in Chicago, contact HFF Senior Managing Directors Jeff Bramson and Jaime Fink, Managing Director Mark Katz and associate director Bryan Rosenberg.

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