KORE Investments, one of suburban Chicago’s most active office players of late, pulled off a quick flip to double its acquisition costs on a property sold to a local government.
Colorado-based KORE pulled in $13 million on a sale of the Rosemont Corporate Center near O’Hare International Airport to the village of Rosemont.
Colliers’ Jon Connor and Francis Prock represented the investment firm in the sale of the Class A office asset at 9501 Technology Boulevard in the northwest suburb to the village. The government plans to renovate the 121,000-square-foot office building before moving municipal employees into the property. Braden Real Estate’s Marc Offit represented the village.
KORE bought the building from the original developer, Ryan Companies, for $6.5 million in 2021 when it was near entirely vacant. “We are beyond pleased with the return on our investment,” KORE chief operating officer Kelli Lind said in a statement.
Though suburban Chicago’s office market saw little leasing growth last quarter, the area around O’Hare was one of the region’s stronger submarkets. Another office building in the area, the Pointe O’Hare building at 9550 West Higgins Road, sold to Chicago-based BA Investment Advisors for $40 million last month.
A joint venture including KORE put another Chicago-area office property the Esplanade II at 3500 Lacey Road in Downers Grove, on the market in May. The 13-story, 622,600-square-foot property still appears on KORE’s website as part of the firm’s portfolio. When it was listed, people familiar with the offering said the property, which KORE purchased for $128 million in 2019, was expected to fetch between $160 million and $170 million.
While interest rates have surged since the initial listing and posed a challenge to close large office deals, the building landed one of the pandemic’s biggest leases. Health Care Service Corp. — the parent of Illinois’ largest insurer Blue Cross Blue Shield — took 133,000 square feet at Esplanade II in a 25 percent downsize from its previous suburban offices.
Vacancy in suburban Chicago offices rose 10 basis points to more than 25 percent last quarter, after remaining unchanged in the second quarter, according to Newmark. Still, rental rates rose slightly, to $23.62 per square foot. Average asking rates in the suburban market have stayed close to that this year.