MAP Real ESTATE
Client Success Stories
Community Organizing and Family Issues – 2245 S. Michigan Ave.
Secures ideal space and $7,352 funding for mission
Challenge
Community Organizing and Family Issues (COFI) was unable to consider renewing its lease because the building in which it was located was for sale. This was likely to allow redevelopment for a residential use or a higher caliber, and much more expensive, office use. The far west loop had utterly transformed in the 9 years since MAP had first represented COFI. A new location in a neighborhood far from the greater downtown area seemed desirable, because of expected lower cost for office space and the need for more than the usual amount of parking for attendees at the organization’s frequent meetings and training sessions. And while such a location would be satisfactory, because of the organization’s mission and constituency base, the inventory of office space in such parts of the city is thin. The prime interest in securing a new lease that was economical and proximate to relatively low-cost parking made a central-business-district location highly problematic.
Action
Alternatives were evaluated within the geographic target area, which excluded the larger central business district because of too-expensive economics and problematic affordable parking, resulting in a short-list of multiple qualified alternative spaces and buildings. Simultaneous negotiations were conducted, maximizing COFI’s negotiating leverage, while maintaining a strong defensive position. MAP negotiated a ten-year lease for space in a building that was at the start of its lease-up, securing very favorable financial terms, inclusive of a low gross rental rate, low annual escalation, high free rent value, turnkey build-out to COFI’s specifications, and a tenant termination option. The building in which COFI leased space is a heavy timber and brick structure (a “mill” loft), as was COFI’s former address.
Result
COFI relocated to a full floor in 2245 South Michigan Ave., a three story vintage building on “Motor Row”, under a ten year, 10 month lease. This area south of the CBD is very active, especially for development of residential, entertainment, and hospitality venues. The concession package included turnkey construction to client’s specifications, and an option to terminate the lease in the event of a funding cut, as well as a remarkably low gross rental rate, and large free rent value. COFI also has the right to sublease portions of its space without seeking the landlord’s consent or sharing profit. Prior to COFI moving, the rental rate of its new lease was $5/sf below market, relative to equivalent available space on the same block. This transaction was completed the year before the Covid pandemic. When the downtown office market stabilizes, likely by the end of 2022, the space will probably again be significantly below market. That’s because in the “Motor Row” area the inventory of office space is relatively small and development will likely continue to be more of a non-office nature. If new office space is built there, it will be new and much more expensive.
Testimonial
We really appreciate Michael’s help navigating the challenges of finding a new home for our organization in a different part of the city, in a wonderful full-floor space with great economics. And, because of MAP’s commitment to the community, we received a $7,352 Investing In Communities distribution, which brings our total IIC funding to $16,985.
Ellen Schumer, E.D. & Founder, Community Organizing & Family Issues
