By Gail Kalinoski
Stanton Road Capital has made its first downtown Chicago office acquisition. The company partnered with Third Lake Partners LLC, a Tampa, Fla.-based family investment firm, to purchase 200 S. Michigan Ave., a 22-story, Class A building in the East Loop, from the Shidler Group.
Crain’s Chicago Business is reporting that SRC was expected to pay about $34 million for the leasehold interest in the building, with Shidler Group retaining ownership of the land. Cushman & Wakefield facilitated the sale.
The property last changed hands in February 2014, when the Shidler Group acquired it from Equus Capital Partners for $69 million, or about $193 per square foot, per Yardi Matrix data. Equus had owned the asset since June 2006, when it paid BGK Group $28.5 million, or about $80 per square foot, according to the same source.
The 371,566-square-foot building overlooks The Art Institute of Chicago and Millennium Park. Completed in 1958, it is also known by its previous name, the Borg-Warner Building. SRC plans to invest significant capital into the historic mid-century tower. Planned improvements include lobby upgrades and cosmetic renovations. The firm plans to implement a “spec suite” program and update amenities, including the tenant lounge.
Tim Ronan Jr., founder & managing partner of SRC, said the firm has had success repositioning other office assets in the Chicago market. The company, which has acquired more than 2 million square feet of office space in the Chicagoland area, also owns ArborLake Centre in Deerfield, Ill., and Woodland Corporate Center in Downers Grove, Ill.
SRC MAKES MOVES
In March, SRC made another purchase in Chicago, acquiring Lakeshore Medical Center, a 135,093-square-foot, Class A medical office building on Chicago’s lakefront, according to Yardi Matrix data. The seller was a partnership between CarVal Investors and Zeller Realty Group.
With the company founded in 2013, SRC principals have acquired more than $6 billion of commercial real estate. The firm currently owns and operates a portfolio of more than 5.5 million square feet. SRC targets opportunistic, value-add and core-plus commercial properties in Chicago, Texas, Southern California and select major Midwest markets.
In November, SRC acquired The Offices @ Village Business Park in Buena Park, Calif., from Westcore Properties. The 10.5-acre, two-building property located at 7000 and 7001 Village Drive totals 141,387 square feet.
In January 2018, SRC purchased 2323 Grand, a 320,976-square-foot office building within Kansas City’s Crown Center from Assurant. The property is located in the city’s Crossroads Arts District.