Acquisitions

Case Study

6460 & 6500 W 51st St

6460 & 6500 W 51st Street, Forest View, IL

Property Details

Transaction Type

Off-Market Distressed Debt Purchase/Redevelopment

Transaction Date

September 2014

Property Size

400,000 Square Feet

In September 2014, Venture One was presented the opportunity to purchase the debt secured by two buildings located at 6460 and 6500 W 51st St in Forest View, IL. The borrower had defaulted on the mortgage, and had left the properties in disrepair. The 186,000 SF 6500 building was vacant, and the 210,000 SF 6460 building had a remaining lease term of 3 months with a tenant who had been at the property for over 10 years. The opportunity was to purchase the debt in a short 30 day window, site unseen, and subsequently foreclose on the property through a per-negotiated consent to foreclose agreement. The opportunity was submitted by a joint venture partner.

Venture One was able to quickly evaluate the short list of due diligence information which had been provided by the lender and identify and mitigate the risks. The buildings were both in need of new roofs, needed significant parking lot repairs and had sections of deteriorating facade. As a result of the long and troubling foreclosure process the tenant in the 6460 building was in the market looking for new space. In less than 30 days from start to finish Venture One prepared a startegy to close on the debt and create a path to title.

Venture One was able to creatively secure a Class 6B tax incentive for the property. Working with a local roof consultant Venture One was able to reduce the cost of the roof replacement by 50% from the origanl bid. Additional improvements included the installation of new metal siding, significant interior demolition, parking lot repairs, office enhancements, floor repairs and the installtion of new energy efficient lights.

As a result of tax incentive and Venture One's proactive building repairs a long-term lease extension was signed with the existing tenant. The buildings were sold to a food company who will occupy the 6500 building as their national headqaurters and production facility.