While the deal is more than double the purchase price of an earlier offer, it is not subject to contractors' mechanic's liens on the property, which are expected to be compressed from $16 million to $4.8 million. The earlier offer was subject to those liens, and it was less clear how far they would be reduced during negotiations.
See:Higher marchFirst Asset Price Follows Default .
However, lien waivers are expected to be in hand early next month, and a closing is anticipated by Aug. 15.
Fulton/Elizabeth LLC consists of principals of construction manager and developer Drew Cos. and office property owners and managers Marc Realty. They believe they got a bargain for the property, which includes 177,522 sf in two brick-and-timber loft style buildings at 300 and 320 N. Elizabeth St. as well as a partially completed 208,000-sf building. Only 20,000 sf is occupied, which hardly deters new ownership, which foresees continued office use.
"It was all price," Drew Cos. senior vice president Dan Lukas tells GlobeSt.com outside the courtroom. "We were able to negotiate a fair price for the property. We expect we'll be able to ride out the market, and ride it up."
The Near West Side continues to improve Lukas notes, and the marchFirst space competes very favorably with the plentiful Downtown sublease space as it comes furnished, wired and "move-in ready," adds Jerry Nudo, vice president of finance for Marc Realty.
"If a tenant is large enough, we'll even complete the parking garage," Nudo says.
A nine-story parking garage was once envisioned as part of an office campus by failed dotcom company marchFIRST.
The deal with Fulton/Elizabeth LLC, represented by Millennium Properties, Inc. president Daniel J. Hyman, was approved Thursday when no other qualified bidders stepped forward. Drew Cos. has developed Sara Lee's Goose Island project as well as multifamily and retail projects on the Near North Side.
In addition to the bankruptcy court process, bidders had to have their plans pass muster with 27th Ward Alderman Walter Burnett, who preferred continued office use of the property. He threatened to withhold support of an earlier residential redevelopment, recalls Nudo. In Chicago, zoning is guided heavily by aldermanic prerogative, which gives members of the city council tremendous sway over development and redevelopment in their wards.
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