Toronto-based real estate investment trust (REIT) Slate Office is under contract to pay roughly $20 million for an occupied office property in Chicago’s North Shore suburb. The building at 275 North Field Drive encompasses 197,500 square feet of office space with access to I-94.
Slate — which was founded in the early 2010s — first broke into the Chicago office market in 2018 with the acquisition of the 31-story office building at 20 S. Clark St. and the 23-story building at 120 S. LaSalle St. Currently, the company boasts a portfolio of 55 properties totaling 7.7 million square feet.
At the time of the negotiations, 275 North Field Drive was occupied and owned by Pfizer. The pharmaceutical giant had moved into the premises following its $17 billion merger with Hospira in 2015. As part of the current deal, Pfizer agreed to a long-term lease for most of the Lake Shore property, which also includes another 65,000 square feet of space available for a potential tenant.
Slate CEO, Steve Hodgson, said in a statement that the deal highlighted the REIT’s “long-term strategy of aligning its portfolio with the right credit tenants to provide both stable cash flow and yield to our unitholders.”
The transaction highlights a growing investor preference for long-term leases with mainly bio tech and life science companies. For instance, Slate Office’s deal at Lake Shore was preceded by Montecito Medical Real Estate’s move in September. The Tennessee-based company forked over roughly $30 million for an occupied office building at 5400 Pearl St. near O’Hare International Airport. That building is anchored by ACL Laboratories (a subsidiary of Advocate Aurora Health Lab testing) though a 10-year lease agreement.
Given the popularity of remote work and the still relatively high vacancy rates, some feel that multi-tenant office properties are increasingly risky. And, although Pfizer has not released a statement regarding its decision to sell 275 North Field Drive, the organization might be echoing an existing trend as many companies have sought to shed some of their office assets during the pandemic and then lease it back to free up cash on their balance sheets.
Explore available listings and find the most sought-after office assets across all major U.S. markets with CommercialCafe.com!
