John M. Schneider kept some real estate he could use to net a larger profit for his firm JMS Capital Group’s suburban Chicago office play as it made a deal to sell part of a business park.
Baxter Credit Union, which is affiliated with the medical products company Baxter, bought two buildings from JMS in Vernon Hills in the northern Lake County suburbs for $41.5 million, according to public records.
A Schneider-owned predecessor company to Pennsylvania-based JMS bought the buildings in 2012 as part of a $37 million purchase of four structures in the Continental Executive Parke, which totals 294,000 square feet across the campus.
The sale is the latest instance of multi-building campuses in Chicago’s northern suburbs of Lake County commanding some of this year’s priciest office deals.
Baxter Credit Union has long been a tenant of the campus occupying the 103,000-square-foot building at 340 North Milwaukee Avenue and Schneider’s company moved on from the building as well as 300 North Milwaukee, a 78,000-square-foot office structure.
In 2020, it struck an 11-year, $44 million lease to remain at the property after a year of negotiation, a JMS news release said at the time. Now Baxter decided to buy instead of lease.
While it’s already a gain for JMS over its purchase price, the firm still has a couple assets it picked up as part of its 2012 acquisition in the area it could capitalize. It held onto the 46,000-square-foot office building at 400 Lakeview Parkway as well as the 73,000-square-foot building at 560 East Bunker Court within the Continental park.
JMS also put capital into renovating and upgrading both the Baxter buildings in 2020, though the cost of those projects is unclear. Representatives for JMS and Baxter didn’t respond to requests for comment.
The price on the Baxter purchase is well below the $190 million New York-based Northeast Capital spent to buy the four-building, 1.1-million-square-foot Kemper Lakes campus in Lake County that’s nearly fully leased. That was the priciest suburban office sale since 2005, before the firm Dermody closed on a $232 million deal to buy the former Allstate campus in Glenview, which is set to be converted into a massive, 10-building logistics center.
Yet the Baxter purchase valued the property across the two buildings involved at about $229 per square foot, a step up from the measure on the Kemper Lakes deal, which yielded seller Apollo Global Management $172 per square foot. The Continental Parke buildings were built between 1999 and 2002.
Only select office buildings are trading hands, as shown by the tenant Baxter wanting to control its real estate. Rising interest rates have in most cases forced investors to wait until a more friendly borrowing environment is in place, once inflation is tamed.
Earlier this year, Opal Holdings spent $180 million on the 697,000-square-foot Corporate 500 complex in Deerfield, long home to Caterpillar, which later announced it was moving its headquarters out of Illinois and put its entire 116,000-square-foot offices in the campus on the sublease market.
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Dermody buys $232M Allstate campus for redevelopment