HELP Leasing Office Space

[Adam L.]

Hello,
I own a 5 story office building in Chicago and am having a difficult time leasing it out. I purchased the building about a year ago 100% vacant and proceeded to throw about $750,000 into remodeling mostly the common areas. Building is about 50,000 rentable square feet. I currently have it about 90% vacant. The building was 100% occupied with tenants like the IRS, Sate Farm and other national company's that needed office space from 2002-2007. Seems like the building started to lose tenants after 2007 and went into foreclosure in 2009 with only 50% occupancy. I need some advice on how I can market this particular property to prospective tenants. I have it listed on the usual LoopNet, costar and craigslist. The building is not located in the greatest area of Chicago which seems to be the major hindrance so far. The building is located 3 miles from Midway airport on the Southwest side of Chicago. Any advice would be extremely appreciated. I have the building professionally managed but looking for ideas I can do on my own to get prospective tenants. thanks Adam

[David Bateman]

Do you have a broker?! I mean, you live in CA and the bldg is in Chi-town, this is your first foray into multi-story office leasing and you have a ton of vacancy! Don't be penny wise and pound foolish, you need to interview three-five office brokers at the building and tell them all to come with their ideas for repositioning the building and leasing it up ASAP!

Also, you need to understand what floor you'd be willing to chop up and spec out for smaller tenants to be ready to go immediately (normally a 2500sf tenant can't wait for a build out), the momentum and buzz you create will start to build once you get some activity. Your broker will rally the troops to get prospects into the building and see all the great things that you're doing in there. Be prepared to spend money on giveaways and incentives - your broker will have the best ideas for your particular market.

Lastly, I successfully repositioned a 103,000sf office building that went into foreclosure after its largest tenant (also State Farm) moved out leaving the building approximately 20% occupied. Within 9 months, we plugged a government agency in approximately 30,000sf and spec'd out 4 suites ranging from 1,300 (it was what the market needed-yours may not need to go so small) to 2,500sf and leased those almost prior to completing construction on them and we leased another 10,000sf to two other tenants totally turning this building around.

It's not easy to do and requires local expertise to get it done so don't waste anymore time and interview those brokers next week! They will drop what they are doing to meet with you, and if they don't they are not the group you need anyway. I know some good brokers in Chicago that could help at least give you some local insight if you'd like. Let me know how I can help.