Continental Towers Named Finalist for Redevelopment of the Year
Continental Towers has been named a finalist for Redevelopment of the year at the Greater Chicago Food Depository’s 33rd Annual Commercial Real Estate Awards!
The Chicago Commercial Real Estate Awards brings together more than 1,850 of Chicago’s top architects, brokers, developers, property managers, interior contractors and design professionals to both celebrate the outstanding achievements in all facets of the industry and to support the Greater Chicago Food Depository. This partnership truly helps to build a better Chicago by raising money to help provide meals for our neighbors facing hunger.
See the complete lists of finalists HERE. We are thrilled to be recognized and to support this important cause!
Glenstar and Rubenstein Partners complete $20 million renovation at Continental Towers
Glenstar and Rubenstein Partners have wrapped up a $20 million renovation at Continental Towers. Launched last summer, it marks the completion of a two-phase redevelopment project started in 2015 at the 910,000-square-foot office complex located at 1701 Golf Road in Rolling Meadows, Illinois.
The centerpiece of the modernization project is a massive one-acre outdoor multi-level landscaped terrace, the largest of its kind in the Chicago suburban office market. The space features flexible seating and spacious gathering areas, which is a perfect amenity for tenants in today’s environment. Fire pits and grills add to the casual vibe, and a synthetic lawn area is perfect for outdoor health and wellness programming. Additional improvements include fully renovated lobbies, elevator cabs, common areas, the addition of a game room and a renovated café/tenant lounge with a fireplace and views of the outdoor area.
“The excellent location and wealth of newly upgraded amenities at Continental Tower offers an exceptional choice for tenants seeking best-in-class space in the Chicago suburban office market,” said Peter Gottlieb with Rubenstein Partners.
In 2015, Glenstar invested an initial $30 million highlighted by the construction of a 734-stall parking garage, reconfigured site plan with newly created entrances, canopies and drop-off areas and a renovation of a 23,000-square-foot fitness center run by Midtown Fitness.
“When we began this project, corporate tenants were looking for highly-amenitized buildings with modern interiors and vibrant communities,” said Glenstar’s Michael Klein. “Now everyone’s concern is around safety and social distancing—and we have a robust program in place to address this. Our new amenities, especially our sprawling outdoor areas, provide tenants the opportunity to work outdoors and meet with their colleagues at a safe distance. We are pleased that the improvements we recently completed translate well into our current environment.”
Continental Towers is a three tower office complex located in Northwest suburban Chicago. The buildings sit on 34 acres with unobstructed views in all directions, easy access to the Woodfield Mall and high visibility along I-90. Notable tenants include Verizon and Panasonic.
Glenstar originally acquired Continental Towers in 2013 and recapitalized the project in 2018 with Philadelphia-based Rubenstein Partners, L.P.
Recent demand momentum is spurring more landlords to plow capital into well-located suburban office buildings, some proving there’s money to be made if updates are done right.
If you ask Steve Wright how to revive an outdated suburban office building to cater to millennials, the answer starts with plants.
At the former OfficeMax headquarters in Naperville, his architecture firm and developer Franklin Partners cut away portions of large trees, put in new smaller ones and strategically replanted some flower beds as part of a multimillion-dollar redevelopment to make the 350,000-square-foot property more appealing to a variety of companies.
“It gives a little better scale to the entrance not to have it be shrouded in landscaping,” says the principal of Chicago-based Wright Heerema Architects. “And we updated the plant material for today’s tastes. There’s no petunias anymore.”
Horticulture isn’t necessarily Wright’s specialty, but knowing what will help convince a company in 2020 to lease an office in the suburbs is. The firm has worked with landlords to redesign more than two dozen suburban office properties over the past three years, projects totaling an estimated $80 million in capital improvements ranging from six-figure face-lifts to a $30 million overhaul.
It’s one of several design and consulting firms helping landlords redraw properties in the suburban office market as it recovers from a decade of high-profile companies uprooting for downtown in pursuit of young talent.
After the suburbs lost 2.5 million square feet of office tenants in 2017 and 2018 combined, companies reversed that trend last year by adding back more than 1 million square feet of net new leasing, the most for any year since 2015, according to data from brokerage Jones Lang LaSalle.
MONEY TO BE MADE
Many pockets of the suburbs are still grappling with high vacancy and landlords having a hard time justifying big renovations out of fear they won’t recoup their investments through higher rents. But the recent demand momentum is spurring more landlords to plow capital into well-located suburban office buildings, some proving there’s money to be made if updates are done right. And they’re relying on firms like Wright Heerema to show them how the next generation of suburban workspace should look.
“We’re creating a sense of community, so that people don’t feel left out being in the suburbs,” says Wright, who has spent four decades designing offices in the Chicago suburbs. Today it is taking on revamps of buildings it helped design when they were new a generation ago, when many corporate giants were operating out of large, single-tenant buildings meant to be more “stately” than welcoming, he says.
That means taking cues from urban trends: natural wood and neutral color tones are in and marble isn’t, for example. But making a sprawling suburban office campus appealing to a company chasing a generation of employees that highly value the experience of their workday requires far more than making a 30-year-old tenant lounge look like something out of the West Loop.
For one, grand front desks typically found just inside the entrance of office properties built in the 1980s and 1990s no longer work. Those are being hidden and replaced by amenities that generate the most activity, like coffee bars, fitness centers and conferencing space. “It’s not unlike walking into a hotel,” says principal Roger Heerema. “There’s a feeling of life that is immediately apparent.”
Strategic use of light fixtures and canopies over entrances make a difference, he says, as does making sure tenants are actually noticing them. At the Westwood, a half-empty, two-building office complex being renovated in west suburban Lisle, the tenant lounge is located near a main visitor entrance. So Wright Heerema designed new lounges for both buildings near second entrances where most employees come and go.
The lobby of Presidents Plaza before, inset, and after its renovation.
At Presidents Plaza near O’Hare International Airport, a reclaimed-wood-clad coffee bar that becomes a regular bar by 4 p.m. each day is now a lobby focal point, and a jumble of planters and trees in its main atrium have been replaced by a minimalist collection of lounge seating, part of a $20 million renovation by Chicago-based developer GlenStar.
The payoff: Tenants have recently leased space at Presidents Plaza for $24 per square foot before taxes and operating expenses, or about 25 percent more than those that signed two years ago, according to the property’s owners.
In the suburbs’ corporate heyday, office buildings “were machines for working—you packed people into them,” says OKW Architects Chairman and CEO Jon Talty. “That attitude has changed profoundly. The lifeless machines need to have meaning to them to be relevant.”
Talty says the trick is to try to use materials and designs that are equal parts “timeless” in style, appealing to today’s tenants and also cost-effective enough that they could be totally redone again in 10 years.
The new Denver-based owner of the former Sara Lee headquarters in Downers Grove recently hired OKW to design another round of upgrades even though the previous landlord spent $7.4 million over the past several years on updates that helped refill the 13-story building with new tenants.
“It’s fashion, to a certain degree,” says Talty, whose firm helped redesign the former Nokia Siemens campus in Arlington Heights for financial services firm HSBC. “The three-button suit is out and we’ve got to move to the next thing.”
Some revamped suburban office buildings are still hunting for tenants. The former OfficeMax home—rebranded as the Shuman—has leased or is finalizing deals with half a dozen companies for about 25 percent of the building. They’re betting demand will grow as more millennials move to the suburbs and downtown rents keep rising.
But many outmoded office properties will be better off repurposed rather than revived with new amenities, Talty says. Especially as companies lay out offices more efficiently to squeeze more people into smaller spaces than they did 10 or 20 years ago.
“They’re not all going to be repositioned,” he says. “The better ones will be, and the weaker ones are going to have to become something else.”
In Premier Place, Glenstar Acquires Top-Tier Investment
THE PURCHASE PROVIDES NEW OWNER GLENSTAR WITH A BOUTIQUE HOSPITALITY-INSPIRED REPOSITIONING OPPORTUNITY WHEREIN THE FIRM HAS PLANNED A MULTI-MILLION DOLLAR INVESTMENT CAMPAIGN THAT WILL TRANSFORM THE BUILDING.
Top tier is the descriptor most used for an office asset located at 59010 North Central Expressway. Glenstar recently acquired Premier Place, a 457,000-square-foot class-A office building, with a 62,000-square-foot Life Time Fitness club. The sale price was not disclosed.
North Dallas’ Energy Square sizzles after $50 million makeover
After spending more than $50 million and 14 months in construction, owners of one of North Dallas’ biggest office campuses are pulling the wraps off the redo.
The 14-acre Energy Square at North Central Expressway and University Drive has as much office space as a downtown skyscraper but spread among five buildings. The office towers were built over 50 years ago and were divided by parking lots, loading docks and driveways.
Energy Square owners GlenStar Properties and USAA Real Estate reworked the entire block, connecting the high-rises with a new entry drive, landscaped plaza areas and shared amenities.
“We are 98.5% done,” said GlenStar principal Matthew Omundson. “We are finishing all the details like artwork and furniture. We put our tenants through a lot with the construction. The response we’ve gotten now that it has been delivered is very positive.”
The office towers are more than 80% percent leased with new deals in the works since redevelopment is wrapping up. Additions to the campus include a large tenant conference center, a fitness center with rooftop patios and multiple outdoor gathering spaces for workers. Fitness facilities alone total 10,000 square feet.
“We have close to 4,000 people working in this campus,” Omundson said. “We needed to do something large enough to accommodate them.”
All of the buildings have gotten new eatery additions, ranging from snack bars to full-scale restaurants.
“We have four on-site food options and we have two more to be signed up soon,” he said.
Public areas in the office buildings have large seating areas with fireplaces, big screen TVs and indoor and outdoor lounge areas. “Every building has a brand-new lobby,” Omundson said.
The campus is visually connected by Brad Oldham’s outdoor art sculptures, and extensive landscaping designed by Studio Outside.
“We have more than a mile of steel planter boxes,” Omundson said.
Architect Gensler, which relocated its regional office to the project, redesigned the buildings. Whiting-Turner was the general contractor.
The redevelopment also included a fix-up of the landmark Meadows Building, one of Dallas’ first “suburban” office towers. The other three office towers were constructed in 1974, 1981 and 1986.
JLL’s Jeff Eckert, Blake Shipley and Haley Hullett are leading the leasing efforts for the property.
GlenStar and USAA Real Estate paid about $150 million in 2015 for the three towers. The historic Meadows Buildings was purchased later from a West Coast owner. The property is USAA Real Estate’s largest holding in North Texas.
“When we acquired this project, I said USAA Real Estate could not be more pleased to be part of this exciting renaissance of Energy Square and the Meadows Building,” Len O’Donnell, president and CEO, said in a statement. “And today, I am extremely pleased that our partnership has delivered on that renaissance. There isn’t anything like it along Central Expressway.”
GlenStar plans to celebrate the project completion with a series of entertainment gatherings.
“Those are the type of events that now that we have the space we will be providing,” Omundson said. “It’s what the employers and workforces are looking for today.”