Chicago’s next suburban office overhaul may be on the horizon as Realty Income looks to offload a Lincolnshire property that could be completely vacant at year end.
The San Diego-based firm has hired CBRE to sell the 818,600-square-foot 4 Overlook Point office complex in Lincolnshire, which sits in the 330-acre Lincolnshire Corporate Center campus, Crain’s reported. The asking price wasn’t listed.
Insurance giant Aon occupies the entire north suburban complex, but its lease is set to expire later this year.
The future of the property has major implications for a suburban office market that’s been pummeled by the remote-work movement, with vacancies soaring to another record last quarter at nearly 31 percent, according to JLL. Since the pandemic, suburban office tenants have shed a combined 3.8 million square feet as they scale back their footprints.
Aon is reportedly on the hunt for a significantly smaller space of about 50,000 square feet, which would reduce its Chicago-area footprint by roughly 93 percent.
Tech company Alight Solutions, which was acquired by Aon in 2010, ditched its 200,000-square-foot space at 4 Overlook Point last year, scaling back its operation by 90 percent in a move to downtown Chicago.
With the Lincolnshire complex showing no signs of recovery, a major redevelopment could be the play, aligning with an ongoing trend in Chicagoland as investors explore more promising uses than office. In Glenview, for instance, Dermody Properties is transforming the 232-acre former Allstate campus into 3.2 million-square-foot logistics park.
Early this year, a venture led by Avgeris & Associates revealed plans to redevelop the former American Hotel Register headquarters in Vernon Hills into a four-building, 900,000-square-foot distribution center.
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However, Lincolnshire officials, who are helping guide redevelopment of the site, have ruled out some industrial uses. Instead, they envision a mix of housing, restaurants, and entertainment. A data center, grocery store or car dealership are also possibilities.
The sale price for 4 Overlook Point will depend on the redevelopment plans proposed by potential buyers. However, it’s expected to be lower than the $148 million paid by Phoenix-based Vereit in 2012, before Realty Income acquired the property in 2021 through a merger with Vereit.
—Quinn Donoghue