Paylocity Signs for 309K in the NW Suburbs

CHICAGO—Retail Properties of America, Inc. has signed a 15-year lease with Paylocity for about 309,000 square feet at its Zurich Towers office building, and company officials say this deal will help them in the search for a buyer for the Schaumburg office complex. Paylocity, currently located at 3850 N. Wilke Rd. in nearby Arlington Heights, will phase into this space beginning in late 2016 and complete the occupation by early 2019.

Zurich Towers has two 20-story towers with a total of about 895,000 square feet. The property sits adjacent to Woodfield Mall, one of the region's top shopping destinations.

“On previous earnings calls, we alluded to a large block lease with a cornerstone tenant at double digit leasing spreads, and that is exactly what we delivered,” says Shane Garrison, executive vice president, chief operating officer and chief investment officer of RPAI, a REIT that owns 192 retail operating properties representing 28.3 million square feet.

“This lease validates the market-leading visibility, amenities and location of Zurich Towers,” he adds. “By leasing approximately 35% of the space to a credit tenant at a market rent and tenant inducement package, we have taken a significant step toward monetizing this asset. We continue to aggressively pursue the dual track of leasing the remaining square feet and seeking buyers that are willing to give us appropriate credit for the remaining vacancy.”

The northwest continues to be one of several suburban office submarkets that struggles, and retaining one of its more significant tenants for 15 years will certainly be a help. Paylocity provides cloud-based payroll and human capital management, or HCM, software solutions for medium-sized organizations and a market capitalization of about $1.9 billion.

“The Northwest market continues to retain the highest vacancy level of all the suburban markets, ending the first quarter with 21.6% overall vacancy, relatively flat from 21.5% reported at year-end 2015,” according to a recent report from Colliers International. Class A properties have fared better, and ended the quarter with a vacancy rate 18.3%, a 40 bps drop since late 2015. “Class A properties in the Northwest were the only sector to achieve positive absorption in the first quarter, ending with 82,491 square feet of positive net absorption compared to 45,888 square feet of negative absorption in last the quarter of 2015.”

CHICAGO—Retail Properties of America, Inc. has signed a 15-year lease with Paylocity for about 309,000 square feet at its Zurich Towers office building, and company officials say this deal will help them in the search for a buyer for the Schaumburg office complex. Paylocity, currently located at 3850 N. Wilke Rd. in nearby Arlington Heights, will phase into this space beginning in late 2016 and complete the occupation by early 2019.

Zurich Towers has two 20-story towers with a total of about 895,000 square feet. The property sits adjacent to Woodfield Mall, one of the region's top shopping destinations.

“On previous earnings calls, we alluded to a large block lease with a cornerstone tenant at double digit leasing spreads, and that is exactly what we delivered,” says Shane Garrison, executive vice president, chief operating officer and chief investment officer of RPAI, a REIT that owns 192 retail operating properties representing 28.3 million square feet.

“This lease validates the market-leading visibility, amenities and location of Zurich Towers,” he adds. “By leasing approximately 35% of the space to a credit tenant at a market rent and tenant inducement package, we have taken a significant step toward monetizing this asset. We continue to aggressively pursue the dual track of leasing the remaining square feet and seeking buyers that are willing to give us appropriate credit for the remaining vacancy.”

The northwest continues to be one of several suburban office submarkets that struggles, and retaining one of its more significant tenants for 15 years will certainly be a help. Paylocity provides cloud-based payroll and human capital management, or HCM, software solutions for medium-sized organizations and a market capitalization of about $1.9 billion.

“The Northwest market continues to retain the highest vacancy level of all the suburban markets, ending the first quarter with 21.6% overall vacancy, relatively flat from 21.5% reported at year-end 2015,” according to a recent report from Colliers International. Class A properties have fared better, and ended the quarter with a vacancy rate 18.3%, a 40 bps drop since late 2015. “Class A properties in the Northwest were the only sector to achieve positive absorption in the first quarter, ending with 82,491 square feet of positive net absorption compared to 45,888 square feet of negative absorption in last the quarter of 2015.”