Former downtown broker buys suburban building from lender
(Crain's) — A small office building once owned by a suburban homebuilders group was sold by U.S. Bank for $1.1 million, about half the amount owed on the property's mortgage.
The Minneapolis-based bank sold the 24,000-square-foot building at 3041 Woodcreek Drive in Downers Grove late last month to a venture managed by former downtown office broker Thomas Grace, according to property records.
U.S. Bank took back the mostly vacant, two-story building in December from the Residential Construction Employers Council, which represents suburban homebuilders in contract negotiations with labor unions. The council owed $2.1 million on its mortgage as of Dec. 31, 2008, according to the council's most recent tax return.
The bank inherited the loan as part of its acquisition last year of troubled Park National Bank. A local executive with U.S. Bank didn't return a call seeking comment.
The council has been hammered by the housing market's collapse. Tax returns show that the council's revenue plunged 98% to $19,260 in 2008 compared with $838,456 in 2007. An executive with the council didn't return calls.
The council still leases 1,800 square feet, compared with 5,200 square feet during the housing boom, according to Mr. Grace.
The building's only other tenant, Civil Environment Consultants Inc., occupies 6,100 square feet but is moving this month to a larger space in Lombard, says Michele Morris, a manager with the engineering firm.
Mr. Grace says the Woodcreek building, constructed in 1984, is still in good condition and he's seen proposals from several prospective tenants.
Rawly Lantz, vice-president of Downers Grove-based brokerage Cawley Chicago Commercial Real Estate, says the market for office space smaller than 30,000 square feet in the west and southwest suburbs seems to be stabilizing.
"The demand is not growing, but the activity has been better," says Mr. Lantz, who wasn't involved in the Woodcreek transaction.
Mr. Grace is a former Cushman & Wakefield Inc. broker who moved to Knoxville, Tenn., in 2004, where he worked as a residential developer. He returned to the Chicago area in 2008 and co-founded Grace Capital Inc. with his brother Michael. The Naperville-based firm is now pursuing multiple acquisition prospects, including faltering condominium projects.
Grace Capital financed the purchase of the Woodcreek building with a $750,000 loan from First National Bank of LaGrange. The homebuilders council bought the building in 2004 for $3 million, according to property records.
