Jason M. Simon has found his next suburban Chicago office revival project.
Simon’s firm Wylie Capital teamed up with Lombard-based Avgeris and Associates to pay nearly $30 million for a 72-acre Vernon Hills business complex featuring a vacant office building and a lightly used industrial warehouse, according to Lake County records and people familiar with the property.
The seller was Consolidated Hospitality Supplies, a large distributor of goods such as mattresses, towels, handcloths, toiletries and single-serve coffee packages to hoteliers across the nation.
An affiliate of the seller in 1998 developed the property, which includes a 208,000-square-foot office building at 100 South Milwaukee Avenue and an adjacent warehouse facility spanning another 257,000 square feet.
The firm used a nearly $22 million mortgage to finance the construction, records show. Consolidated Hospitality’s headquarters now occupies another Vernon Hills office building at 544 Lakeview Parkway.
The village government as well as the seller marketed the property as a redevelopment opportunity, as plenty of land on the site remains unused, and the office building requires a turnaround after sitting vacant for several years.
Wylie has been involved in suburban Chicago office plays before.
In 2018, it partnered with Chicago-based Core Acquisitions to buy a 106,000-square-foot Deerfield office building called Ten Parkway North from a Blackstone affiliate for just $6.8 million, a discount from the $25 million the property fetched in 2010. It was fully leased to a single tenant, Markel Corporation, before Wylie and Core’s purchase, which closed after Markel announced it was vacating the property.
Wylie and Core brought new tenants into the property to bring it to 50 percent leased, and a Colliers listing represented by Simon shows it’s for sale or lease.
Neither Wylie nor Avgeris, which is led by James P. Avgeris who founded the firm in 1992, returned requests for comment. The seller also did not return a request for comment.
It’s unclear how the buyers plan to capitalize on their purchase. It’s possible they could seek to redevelop the property into another use, such as more warehousing, or apartments, which have been in demand in the suburbs. Or they may be planning on renovating the office building to make it attractive again to new corporate users by upgrading amenities and making other improvements.
Several other developers are also teeing up big repositioning projects for suburban offices as the asset class stays out of favor with tenants and investors while the suburban office vacancy rate remains at a record high of nearly 30 percent, according to brokerages. Both Rosemont-based Brennan Investment Group and Nevada-based Dermody Properties are in the midst of massive office-to-industrial transformation projects in Rolling Meadows and Glenview, respectively.
Editor’s note: This story has been updated to correct the spelling of Wylie Capital in a headline.