New York investor buying office towers near O'Hare

A New York real estate investment firm is jumping into the hottest office market in the Chicago suburbs with a trophy office complex near O'Hare Airport.

Adding to its mixed Chicago property portfolio, Angelo Gordon has reached an agreement to buy the 835,000-square-foot Presidents Plaza office towers for $148 million from a joint venture of PGIM Real Estate and GlenStar Properties.

The $177-per-square-foot deal for the pair of 12-story buildings at 8600 and 8700 W. Bryn Mawr Ave. stands to end a 12-year ownership run for PGIM and GlenStar, which paid $129 million for the buildings in 2006, according to Cook County property records.

Chicago-based GlenStar, which leases the buildings, will retain a minority stake in the property, according to industry newsletter Real Estate Alert, which first reported the news. Spokesmen for the ownership companies could not be reached for comment, and a spokesman for Angelo Gordon declined to comment.

GlenStar and PGIM are cashing out on the buildings amid a tight market for office space near O'Hare, which makes it an attractive investment for a buyer to drive up rents.

Office vacancy in the O'Hare submarket was 16.4 percent as of the end of 2017, far below the 23.3 percent average for all Chicago suburbs and the lowest vacancy rate among the six suburban submarkets tracked by real estate firm Jones Lang LaSalle.

At Presidents Plaza, Angelo Gordon will take over buildings that are 92 percent occupied, according to Real Estate Alert, but with in-place rents that are 13.1 percent below market rate, according to a JLL marketing flyer.

The largest tenants in the building include the headquarters of hardware retailer True Value, health care services provider AIM Specialty Health and Property Casualty Insurers Association of America, according to real estate information company CoStar Group.

Presidents Plaza will be Angelo Gordon's only office property in the O'Hare submarket, according to research firm Real Capital Analytics, but it has plenty of other buildings in its local portfolio.

The company last fall partnered with Chicago-based Centrum Realty & Development to buy a Kmart in Avondale for $16.5 million, which they plan to redevelop for retail tenants.

Angelo Gordon also has ownership stakes in downtown Chicago office buildings at 200 W. Jackson Blvd. and the Citadel Center at 131 S. Dearborn St., as well as industrial and self-storage facilities throughout the Chicago area, according to Real Capital.

Editor's note: A previous version of this story misstated the status of the Kmart in Avondale.