Suburban Landlords Creating New Class A+ Offices
The suburbs overall may have an elevated vacancy rate, but many class A properties in select submarkets are doing quite well.
CHICAGO—Following a national trend, some suburban landlords are ready to spend considerable amounts redeveloping a select group of class A properties. GlenStar Properties has helped lead the way in the Chicago metro area, and has just launched the largest redevelopment project ever undertaken in the Northwest suburban office submarket, a $28 million capital campaign at its Schaumburg Corporate Center.
“We have every confidence in the northwest suburban office market as evidenced by our significant commitment to this redevelopment,” says Michael Klein, a GlenStar principal. “We completed a similar but smaller scale redevelopment of Continental Towers in Rolling Meadows about three years ago, and the result is a property that is currently over 90% occupied.”
GlenStar acquired the property in March 2017, marking the first time the property had changed hands since it was developed in the early 80’s. The amount paid was undisclosed, but Cook County property records show a price tag of $70,749,500.
The complex has three buildings: a four-story, 380,000-square-foot building at 1501 Woodfield Rd.; a 14-story, 310,000-square-foot building at 1515 Woodfield Rd.; and a 14-story, 310,000-square-foot building at 1475 Woodfield Rd.
Often considered an A- asset, GlenStar renovation program will upgrade the center to class A+ status by adding hospitality-type amenities that rival those at the most sought-after CBD properties.
Plans include the construction of:
- A new parking deck that can accommodate more than 500 cars and a temperature-controlled skybridge connecting the new structure directly to the office complex.
- Nine modern spec suites ranging in size from 1,700 square feet to 33,000 square feet.
- A state-of-the-art, 10,000-square-foot conferencing center with adjacent pre-function and break-out space.
- A new “Club Room” that features ping-pong, pool and foosball tables, as well as TVs, a bar and a fireplace that will further facilitate socializing and camaraderie among the tenants.
- A new spiral staircase that will provide direct access from the atrium to the fitness center on the lower level.
- A new entry to 1501 E. Woodfield that will include new drive-up lanes and a large canopy. Refreshed landscaping/pavers will create a well-defined entry.
- In addition, GlenStar will update the lobbies, elevators, deli and signage throughout the property.
But it’s the 17,000-square-foot glass atrium in the 1501 building, the only one of its kind in the suburbs, that sets the complex apart. GlenStar plans to make it into a true hub for all Schaumburg Corporate Center activities by creating an inviting and useable space. The developer will update the ceilings and lighting, and add new finishes, furniture, and fixtures, as well as a large video screen.
GlenStar has a track record of successfully completing similar projects. In less than two and a half years, the company took over Continental Towers in nearby Rolling Meadows, gave it a $23 million rehab, and raised the occupancy from 55% to 93%.
Schaumburg Corporate Center, currently 74% leased, is in much better shape than Continental Towers was when GlenStar bought it. Notable tenants are Pepsi, Verizon, Motorola Employees Credit Union, American Agricultural Insurance Co. and Roanoke Insurance Group.
“The complex has great ‘bones’ and we believe once this project is complete we will have created an office environment that is unique in the suburbs,” adds Klein. “We plan to capture those tenants that want a fresh property that caters to their work/life needs.”