Parkway Corporate Center
Schaumburg, IL | 162,000 SF | Investment
A 162,000 SF single-story office complex in a major, but challenged, office market was 50% leased at time of acquisition. The asset was owned by a special servicer through foreclosure. The buildings featured Class A finishes, institutional quality, unique one-story flexibility, and upside to appeal real estate taxes based on the acquisition price, which was attractive at 25% of replacement cost.
The acquisition was an all-equity JV and included funds for leasing commissions, TI, and capital investment. Real estate taxes were successfully appealed, leases extended, and new leases executed to bring occupancy to more than 85%. Leverage was added to enhance equity returns. Stabilized total project cost was less than 50% of replacement cost. In December 2016, the office complex was sold. Returns to investors, including cashflow during ownership, achieved an internal rate of return in excess of 17% and an equity multiple of 1.60.