Danny Rabb, director of acquisitions for ATEL, tells GlobeSt.com the company purchased the building for $6.85 million, translating to an average cap rate of 7.1%. Rabb says that the company was most impressed with the tenant's credit, along with its long-standing lease agreement. Seven World, a subsidiary of the international marketing firm Schawk Inc., has 14 years left on a 15-year lease.

The acquisition is the first Chicago property for the firm, but Rabb tells GlobeSt.com the company is "actively looking" for other Chicago-area opportunities. "It's a great city, and it's going to be around for a long time," he says. "River North is a vibrant area, and it has a great appreciation value."

According to CB Richard Ellis' most recent quarterly report, the River North area shows a wealth of opportunity for tenants. With a vacancy rate of 26%, the neighborhood is ripe for improvement. During the second quarter, the 380,000 sf of class A office inventory experienced the most activity with a positive absorption of 6,400 sf. Even more promising are those facilities with current, long-term tenants, says ATEL chief executive officer, Dean Cash.

"The River North area is on fire," Cash says. "With this credit and the term of the lease, the long-term prospects for this building are the best of any single-tenant deal in the market."

Andrew Sandquist of CB Richard Ellis worked on behalf of Barnett Capital, while ATEL was represented in-house. ATEL Properties is a wholly owned subsidiary of ATEL Capital Group. The company says it plans to leverage its numerous corporate relationships with investment grade companies to actively pursue the sale-leaseback market.

Instant Insights /

ATEL Enters Chicago Office Market With River North Acquisition

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