CHICAGO—Hundreds of commercial real estate professionals gathered yesterday for a conference on re-positioning assets, and did so in a very appropriate space. Instead of one of the usual downtown hotels, Hansen Realty hosted the meeting at its 350,000-square-foot Bradley Business Center, a former manufacturing facility on the Northwest Side that it plans to transform into a high tech office and flex space.
Participants met in the cavernous, nearly vacant building, which a joint venture between Hansen and Centrum Partners bought from Wrightwood Capital LLC for $6.25 million in 2011. The latter bought it for more than $20 million in 2008, but the recession upset their plans.
“It will probably take about three to four years to lease up this property,” John Hansen, principal of Hansen Realty, told GlobeSt.com. The owners are currently working on a rehab of 55,000-square-feet of office space. The building had been occupied for years by the manufacturer Bodine Electric Co.
Although this structure at 2500 W. Bradley Pl. is far from the hot neighborhoods of River North and the West Loop, Hansen believes there is enough demand for this particular niche in the market. Office users, for example, will find the North Center neighborhood quite convenient. “I don’t know why people go downtown since it’s such a hassle, and there is no parking,” he said. The partners have spoken to two or three prospective tenants that want the entire office space and about 30,000-square-feet of the warehouse.
One theme of the conference was that developers need to keep an open mind about the possible uses for a re-positioned property. Hansen said, for example, that recreational users may occupy part of the new center. One questioner at the morning panel asked him whether such tenants would clash in any way with office users. But Hansen was able to point to the developers’ experience with a similar set of industrial buildings next door at 2630-2650 W. Bradley Pl. There, they renovated the space and mixed in traditional office users, a movie studio and recreational tenants such as a swim school and the youth soccer program Lil’ Kickers.
“They really have different hours,” he explained, and although he admitted that he was initially skeptical of recreational users “they helped pay for the building and not one has gone out of business.”
Securing the proper zoning remains a challenge in these projects, Hansen added. “The city was not ready for recreational use, but luckily the alderman was,” and helped get the needed changes through the city council. And as the plans for the 2500 building go forward, “we’re calling our zoning attorney every day.”