KORE Investments Pays $129M for Chicago-Area Office Tower

The Class A property commanded the Chicago market’s highest price of the year for a suburban office property.

3500 Lacey Road. Image courtesy of JLL

In the Chicago market’s largest suburban office deal of 2019, KORE Investments has acquired 3500 Lacey Road, a 583,982-square-foot Class A trophy office high-rise in Downers Grove, Ill., for $128.5 million.

JLL’s Capital Markets team led by Senior Director Patrick Shields, Senior Managing Directors Jeff Bramson and Jaime Fink, Director Sam DiFrancesca and International Director Bruce Miller represented the seller, BentallGreenOak—a new firm created this summer following the merger between Bentall Kennedy and GreenOak Real Estate. JLL also procured KORE Investments, a Denver-based real estate investment firm.

Also known as Esplanade at Locust Point II, the 12-story building in DuPage County is located in the East-West Corridor submarket at the convergence of Interstates 355 and 88. The 19-acre site has immediate access to the Yorktown-Oak Brook retail corridor and executive housing stock in Oak Brook, Hinsdale, Burr Ridge and Clarendon Hills.

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The building was the former headquarters of Sara Lee, which occupied about 80 percent of the asset before it moved its Hillshire Brands spinoff to 400 S. Jefferson in Chicago’s West Loop in 2012. The previous owner of 3500 Lacey Road spent more than $7.4 million in capital improvements in 2014 after Sara Lee left to reposition the building for multiple tenants. The strategy worked and the asset is now one of the premier multi-tenant office properties in suburban Chicago with 96.9 percent occupancy. Tenants include CompTIA, Glanbia Performance Nutrition, Havi Group, Invesco, Logicalis, CJ America and Duravant.

Amenities at the building designed by Skidmore Owings Merrill include a ballroom, on-site deli, conference facility, six-level parking deck and car wash and detail service. The Esplanade campus features a Bright Horizon Daycare, The Esplanade Fitness Center and a Doubletree Hotel. A shuttle service between the property and the Metra BNSF Line Belmont Station is also available. 

Suburban Appeal

Investors have been increasingly focusing on Chicago suburban office properties in recent months.

For example, in August, Fairbridge Properties acquired Oak Brook Gateway, a 233,200-square-foot Class A office building in Oak Brook. The REIT purchased the asset at 1111 W. 22nd St. from The Blackstone Group for $42.9 million. The eight-story building was 93 percent occupied at the time of the sale. Fairbridge officials noted they were attracted to the solid tenancy of the building as well as the location in the East-West submarket and continued development in the area.

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