Finding opportunity in downtown market
DAVID ROEDER email@example.com May 1, 2012 5:58PM
Office building at 100 W. Monroe has been sold to an investor betting that higher rents are coming to the downtown market.
Updated: June 3, 2012 8:20AM
John Murphy isn’t the biggest name in Chicago real estate, but most on the commercial side of that tight-knit field will recognize him as someone with a nose for opportunity.
Murphy is the president of MB Real Estate Services LLC, where he has leased up and arranged financing for scores of projects. He also has branched out, first as a residential developer with his work at Lincoln Park 2520, a three-tower project on the site of the old Columbus Hospital at 2520 N. Lakeview.
Against significant odds and early enmity from the neighbors, Murphy and partners are due to deliver the initial units in the luxury housing complex in about 30 days. They are the first high-rises built in Lincoln Park in more than 30 years.
He also has placed a bet on the downtown office leasing market. He has led a group of investors in buying an 85-year-old office building at 100 W. Monroe. He said the almost fully occupied building went for $12.5 million. The seller was longtime owner Tom Horwich, chairman of Rubloff Residential Properties.
Small tenants fill the 22-story building. “A lot of the rents are somewhat under the market,” Murphy said. He said that if leasing in downtown Chicago continues to strengthen, he probably can raise rents 20 percent and still undercut the cost of moving for tenants.
Several groups have suggested that he convert it to a hotel. The 1927 design has the vintage look that could appeal to boutique lodgers and its spot across the street from downtown’s Chase Plaza improves views, but Murphy said he’s not inclined to go in that direction.
With other investors, Murphy also owns a 1970s office building at 200 W. Jackson, where he said he closed a $58.5 million refinancing last week.
AUCTION ACTION: When real estate brokers list a property they call “one of a kind,” the description is usually overstated. But it probably applies to a forthcoming auction of property in St. Charles.
CBRE Inc. will handle the sale of the former Rathje Campus of the Glenwood School for Boys and Girls. The campus is at 41W400 Silver Glen Road and includes much to play with: 120 acres, eight residence halls, athletic facilities, executive housing and a woodshop. Douglas Johnson, managing director of CBRE Auction Services, said the property could be adapted for a religious or corporate retreat, senior living or other uses. He said the campus opened in 1994. It shut down, except for a final high school graduating class, last year.
The open outcry auction will be at noon June 5 at the campus. The suggested opening bid is $5 million.
The original Glenwood school campus remains in south suburban Glenwood.
PROTECTION, PLEASE: The Chicago Housing Authority’s Lathrop Homes, sitting on 35 acres at 2000 W. Diversey, has been listed on the National Register of Historic Places. The site is up for redevelopment and the designation should help the cause of preservationists and residents who want to keep the low-rise buildings. Landscape architect Jens Jensen designed small parks on the site.