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OAK BROOK, IL-The worst is over for Great Lakes REIT, at least in terms of the 1.2 million sf of lease expirations it faced this year. Even though officials see the light at the end of the vacancy tunnel, the company is still studying sales of its suburban office assets as well as the entire company.

Company officials reaffirmed their “strategic alternatives initiatives,” which could include selling the company, during a recent earnings conference call. The REIT recently sold two suburban Chicago assets for a combined $10 million.

The larger deal was the $6.1 million received by Great Lakes REIT for a 62,000-sf building at 191 Waukegan Rd. in Northfield. The company acquired the asset in 1998 for $4.2 million, and had most recently boosted occupancy to 88.8%. While that is well above the REIT’s overall 78.3% occupancy rate, the 7.5% leveraged internal rate of return it saw on the north suburban investment was more than 20 points below its overall track record.

Earlier this summer, Great Lakes REIT sold 165-175 Hansen Court in Wood Dale for $3.9 million.

“We continue to pursue targeted dispositions,” says CFO James Hicks.

The REIT’s leasing team has pared 1.2 million sf of 2003 rollover—nearly 20% of the portfolio—down to 173,000 sf entering the fourth quarter, and the company continues to average 30,000 sf a month in deals, adds president and COO Patrick Hunt.

“Overall, vacancy in our markets appears to have bottomed, although there continues to be pressure on lease economics,” he adds.

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