The Goose Island offering, which does not come with an asking price, will test how investors feel about a pocket of downtown poised to look dramatically different in a few years than it does today. The building is across the street from a former Greyhound bus maintenance facility that developer Onni Group plans to redevelop with 2,700 apartments, and sits adjacent to a 3.5-acre boat yard where Chicago restaurateur Brendan Sodikoff plans to build a dining and entertainment complex.
One block south, Bally’s is forging ahead with its plan for a 1 million-square-foot casino and hotel project on the longtime Chicago Tribune Freedom Center site that could bring a deluge of new visitors to a River West neighborhood that is already transitioning from its industrial past into a hub of new commercial and residential buildings.
That mix of investment around 900 N. North Branch could help draw in prospective buyers for the building, which touts 500 feet of riverfront access. Though Goose Island is far from established as a destination for major office users, the area has lured more companies in recent years, including Crate & Barrel’s CB2 division, Lakeshore Beverage, Elite Staffing and logistics firm Transportation One.
But it’s also a difficult time to be marketing an office property with no in-place income as the rise of remote work fuels record-high downtown office vacancy. The broader economic slowdown could curb interest in an office building, and rising interest rates will make it more costly for buyers to finance both a purchase and interior renovation work.
Cushman is framing the property as a “blank slate” for workspace to be built out suiting tenants’ post-COVID needs, complete with highly visible signage. The flyer also plays up the opportunity to reposition all or part of the building with new uses. The offering also includes a 19,249-square-foot land parcel adjacent to the building and a 2-acre parking lot across the street that could be purchased separately as development sites.
WP Carey bought the building for $28.7 million in a 2008 sale-leaseback deal with Kendall’s former parent company, Laureate Education. Laureate signed a 20-year lease at the time that was due to expire in July 2028. After initially hunting for a user to sublease the space after Kendall moved out, Laureate bought out the remainder of its lease, according to people familiar with the deal .
WP Carey hired Chicago leasing brokerage Madison Rose last year to market the buildings to prospective new tenants, though the interior of the building remains largely the way it looked when Kendall vacated the space. Madison Rose is still marketing the building while WP Carey pursues a potential sale.
A spokeswoman for WP Carey did not respond to a request for comment.
The North Branch building was built in 1912 as a warehouse for Griess & Pfledger Tanning, according to the Cushman flyer. The property was renovated in 1999 to become a research facility for Sara Lee, though the company moved out just two years later. Kendall paid $37 million for the property in 2003, a combination of what a source said at the time was roughly $18 million from the school and a nearly $19 million lease buyout payment from Sara Lee.
WP Carey specializes in sale-leasebacks and owning so-called net lease properties, those that are owned by an investor but with a tenant covering most building operating expenses.
Cushman & Wakefield Executive Directors Tom Sitz and Cody Hundertmark are marketing the 900 N. North Branch property for WP Carey.