Northbrook office tower goes on the market
Michigan-based Farbman Group, an agent for the building owners, has retained the CBRE real estate services firm to facilitate the sale of the office property located at 40 Skokie Boulevard, they said.
The building is 83% leased and contains nearly 110,000 square feet of rentable space along with 373 parking spaces, according to CBRE marketing materials.
Medical office tenants make up 62% of the occupied square footage and the current owners recently came to an agreement on a 10-year lease with Huntington Bank. Moreover, the owners have come to terms on new leases, renewals and expansions for nearly 35,000 square feet of the building over the past year, the CBRE marketing materials added.
The building was acquired for nearly $9.9 million in February 2016, according to Cook County records.
They also indicate the owners received a nearly $9.3 million mortgage in late June 2019.
That could be a reason why the owners are now seeking a buyer, suggested real estate industry expert George Mack, a principal with Cresa Capital Strategies, a commercial real estate advisory firm.
Mack observed they may want to do a sale before any bank involvement or court-appointed service enters the process.
'By being proactive and bringing it to market they stabilize the asset and achieve higher values and then execute the sale without the bank having their claws in there scrapping for every last dollar,' Mack explained.
Yet he noted building ownership currently has some advantages despite a local corporate real estate market that he described as 'fairly soft.'
Mack noted office building vacancies are now about 28% in the area, so the 83% occupancy rate is ahead of the curve.
'You are outperforming what the market is doing there so that is certainly beneficial from an investment perspective,' he noted.
Mack sensed medical-based tenants are another plus for the owners.
'Medical offices have been extremely resilient as they have been one of the better performing asset classes over the past five years,' Mack said. 'They perform well… and they are in locations that they don't really want to move.'
A spokesperson for Farbman Group President Andy Gutman said in an e-mail, 'Ownership believes the timing is right to explore the market now that the building has been re-tenanted following the post-Covid period.
'They see this as an opportunity to gauge the recovery of the office sales market. Given the building's prime location in the heart of Northbrook, they consider it well-positioned for this assessment. Skokie Boulevard has outperformed other northern submarkets, and we believe that will be reflected in pricing and interest.'
The building opened in 1987 and 40 Skokie Property LLC has owned the property since 2016, they added.
CBRE spokesperson Casey Davison said there is no set asking price for the building and offers are due by the end of July.
Davison added the building has a newly remodeled conference room and upgraded lobby and common areas.
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