Chicago and Aeroterm LLC Reach Agreement for $200M Project at O’Hare

By Gabriel Circiog, Associate Editor

The City of Chicago has reached an agreement with Aeroterm LLC to start construction of the Chicago O’Hare International Airport Northeast Cargo Center. Mayor Rahm Emanuel announced the development project, which will expand and enhance the efficiency of O’Hare’s airport cargo operations, as well as create around 1,200 construction jobs, 1,200 permanent on-site and 10,000 regional jobs related to the development.

The $200 million project will provide approximately $600 million in economic benefits to the airport over the life of the agreement, at no cost to Chicago taxpayers. Funding for the project will be ensured through a $130 million investment by Aeroterm and over $62 million of airport funds.

“The extensive progress we’ve been able to make on the O’Hare Modernization Program (OMP) has paved the way for this project to commence, with new, larger runways and taxiways that allow the airport to handle the larger, newest generation of B747-8 cargo planes,” said CDA Commissioner Rosemarie S. Andolino. “Because of our successful efforts, Chicago and O’Hare are able to better serve existing cargo carriers and attract new cargo service, which will boost Chicago’s position as an international air freight hub.”

The Northeast Cargo Center will be constructed in three phases on around 65 acres of undeveloped property on the northeast quadrant of O’Hare International Airport. Green planning, design and construction practices will be incorporated in all aspects of the development. The buildings are designed to achieve LEED certification and will feature green roof space.

A lease agreement between the city and Aeroterm will be submitted for approval to the city council in June.

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Lowe Enterprises Investors Acquire Affinia Chicago Hotel

By Gabriel Circiog, Associate Editor

The 28-story Affinia Chicago Hotel has been acquired by Lowe Enterprises Investors on behalf of an investment client. The seller, Denihan Hospitality Group, was represented by Eastdil Secured. Lowe Enterprises Investors represented itself in the transaction.

Hotel management will be taken over by Destination Hotels & Resorts—an affiliate of Lowe Enterprises Investors—and will be rebranded as MileNorth, a Chicago Hotel.

Located at 166 E. Superior Street in the heart of downtown Chicago, the 213-room hotel is steps away from the Magnificent Mile shopping district and three miles from the convention center.

Bleecker Seaman, co-CEO of Lowe Enterprises Investors, said MileNorth was recently completely renovated—permitting the company to concentrate its resources on “enhancing the property’s value by repositioning it as an independent boutique hotel.” MileNorth features 213 guestrooms, around 3,000 square feet of meeting space, a rooftop bar and a ground floor restaurant.

Lowe Enterprises Investors has been responsible for the investment of $6 billion in real estate assets since its inception in the late 1980s. In the Chicago area, the firm currently operates Orrington Office Plaza in Evanston, 8501 West Higgins in Chicago and the Embassy Suites Chicago-North Shore Deerfield on behalf of pension fund clients. As far as Illinois hotel properties go, the firm has acquired and sold on behalf of its clients the Doubletree Rosemont O’Hare, the Rosemont Suites Hotel, the Oakbrook Hills Hotel and the Crowne Plaza Springfield.

Senior vice president of acquisitions for Lowe Hospitality Group, Mike Everett, said the team has focused on the Downtown Chicago submarket and is expecting significant growth in the area in the coming years.

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John Hancock Real Estate Acquires 150 North Michigan Avenue Office Tower

By Gabriel Circiog, Associate Editor

The 41-story 150 North Michigan Avenue office tower has been acquired by John Hancock Real Estate—the U.S. unit of Manulfie Real Estate—for $102 million. As previously reported by Commercial Property Executive, Jones Lang LaSalle Inc. was hired by Germany-based SEB Asset Management A.G. to market the property—previously acquired in 1999 for around $113.2 million.

Built in 1984, the Class A office tower is also known as the Crain Communications Building—as the publisher of Crain’s Chicago Business recently signed a 10-year lease for 65,587 square feet, which included naming-rights.

The landmark 661,482-square-foot tower, which stands out in the downtown Chicago skyline thanks to its unique diamond-shaped roofline, is the newest addition to John Hancock’s $4.3 billion U.S. real estate portfolio. Located in the East Loop of Chicago’s central business district, the office tower overlooks Millennium Park and offers expansive views of Lake Michigan.

John Hancock Real Estate has a rich history in the Chicago real estate market, dating all the way back to 1973. Currently, the company’s real estate portfolio in the Midwest includes 24 office and industrial properties, which total around five million square feet and hold a market value of approximately $600 million.

Apart from 150 North Michigan Avenue, John Hancock also owns and manages a 37-story office tower located at 191 North Wacker Drive, acquired in 2004, and the Schaumburg Corporate Center—a one-million-square foot office complex developed by the company and completed in 2003.

Kevin Adolphe, Chief Operating Officer of Manulife Financial’s Investment Division and President and CEO of Manulife Real Estate, said John Hancock has expanded its real estate investment portfolio in the last twelve months by over $700 million in assets. 150 North Michigan Avenue is seen as a core real estate asset with solid long-term value in a key market, fitting the company’s investment strategy.

Photo Courtesy of: www.manulife.com

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TGM Associates LP Acquires 576-Unit Apartment Complex in Schaumburg

By Gabriel Circiog, Associate Editor

In one of the biggest suburban multifamily purchases in over four years, an affiliate of New York-based TGM Associates LP paid $86.7 million for an apartment complex in Schaumburg, ChicagoRealEstateDaily.com reports.

Located at 10 N. Lincoln Meadows Drive, the 576-unit apartment complex was built in 1990 and was purchased by Invesco Real Estate in 1995 for $38.4 million. TGM closed the deal with Invesco on April 11, financing the acquisition with a $60.5 million mortgage from Freddie Mac that was arranged by CBRE Inc.’s capital markets group, according to county records. The property has been renamed TGM Park Meadows.

Senior vice president at CBRE’s Chicago office, John Jaeger, said the property was appealing to investors not only due to its location close to Woodfield Mall and Interstate 290, but also due to the possibility of increasing rents upon completion of needed renovations. He also said TGM represented itself in the deal. John Gochberg, TGM Chief Operating Officer, confirmed that improvements are planned for the complex in the next 12 to 24 months.

According to a report from Chicago-based Appraisal Research Counselors, the Lincoln Meadows deal is the largest apartment sale since January 2008, when the 283-unit Park Evanston was sold for $101.1 million to TIAA-CREF.

Mr. Grochberg said the Schaumberg complex is the second property TGM has owned in Illinois. The other property, Windscape of Naperville, was sold in 2007 to Sterling American Property Inc. The current portfolio of TGM includes close to 13,000 units in 23 states.

Invesco Managing Director Paul Michaels said Lincoln Meadows lived up to the firm’s expectations and, after cashing in on the investment, plans to reinvest in newer assets.

Photo Courtesy of: www.tgmassociates.com

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Chicago Senior Care Acquires Clare at Water Tower in Bankruptcy Auction

By Gabriel Circiog, Associate Editor

Chicago Senior Care LLC has acquired the luxury senior-housing high-rise Clare at Water Tower after winning an auction in the U.S. Bankruptcy Court in Chicago, Chicagorealestatedaily.com reports.

The partnership between Harrison, N.Y.-based Senior Care Development LLC, New York-based Fundamental Advisors LP and Des Moines, Iowa-based Life Care Companies LLC bid $53.5 million in cash for most of the development’s assets. The venture also agreed to assume liabilities that include around $57 million in resident deposits.

The 53-story tower, located on Loyola University’s Water Tower Campus, offers access to various amenities such as multiple dining venues, a business center, a performance center, a day spa, an entertainment center and a fitness and aquatic center.

After multiple rounds of bidding, the Senior Care group outbid local real estate developers Michael Reschke, chairman and CEO of Prime Group Inc., and David Crawford, principal at D2 Realty Services Inc., by $1 million, according to Mr. Reschke.

The Clare at Water Tower was developed by Homewood-based Franciscan Sisters of Chicago, and the $272 million project was finalized in 2008. In September 2011, the Clare defaulted on its $229 million mortgage and in November 2011 filed for Chapter 11 bankruptcy protection. According to court documents, only 83 units—roughly 34 percent of the total units available—were occupied at the end of 2011.

David Reis said the company plans to slash unit prices by over 20 percent and aggressively market the care services to private-pay patients.

Senior Care Development, financial partner Fundamental Advisors LP and management company Life Care Companies LLC have already collaborated in taking over two other distressed retirement communities in the region: Monarch Landing, located in Naperville, and Sedgebrook in Lincolnshire.

Photo Courtesy of: www.theclareatwatertower.com