CHICAGO-Younan Properties Inc., headquartered in Los Angeles, has sold 211 E. Ontario. The 172,000-sf office building was acquired by Northwestern Memorial Hospital. The sales price was $35.7 million.
The 18- story building, which is in the North Michigan Avenue submarket, was constructed in 1984. Younan Properties had renovated the common areas and lobby, did improvements to the lighting and “improved the image of the building,” says Zaya Younan, chairman and CEO of Younan Properties. “The building had a very nice makeover in the short time period that we owned that asset.” The estimated cost for the improvements was less than $1 million, Younan tells GlobeSt.com.
Younan purchased the building in May 2006 for approximately $23 million, Younan says. “We had acquired this asset two years ago, and we bought an asset that basically needed some occupancy improvement and some marketing repositioning,” he says. “We felt that we had added that value that we could have and we had a credible buyer who was interested to buy it…and the asset sold at a great price.” The building was sold in 2006 by Zeller Realty Group. The recent sale to Northwestern Memorial Hospital generated a total return to investors of approximately 105% and an internal rate of return of 51%.
The building is currently about 90% occupied, “but, naturally, has rollover in the rents,” Younan says. Northwestern Memorial Hospital “is planning to fill the building as space becomes available,” he says. Northwestern will use the space for physicians and administrative offices, he says. The property is within walking distance of the Northwestern University medical campus and hospital in addition to retail and restaurants. Earlier this year, the hospital leased 150,000-sf at the Time-Life building, 541 N. Fairbanks Ct.