Could Micro-Office be Next?
Tiny desk? Tiny water cooler? Tiny elevators? Probably not, but it’s fun to imagine after learning micro apartment player Cedar Street Co has turned to office and retail, where opportunistic plays are still abundant.
The company now has 1M-plus SF of commercial space (office, retail, industrial, valued at $45M) after the $3.5M acquisition of a 50k SF, 85%-occupied office building at 1112 S Washington St in Naperville, partner Alex Samoylovich tells us. (He’s snapped with artist Cheryl Pope and Cedar Street partner Jay Michael at the company’s 10th birthday party.) Purchased out of foreclosure from Northern Trust, the property was part of now-bankrupt Qualteq’s portfolio, which Cedar Street has picked off in several buys this year, including the 17k SF 500 N LaSalle (new home to Gino’s East, below).
Alex says the company’s strategy has always been value-add plays that generate cash flow, especially in markets they’re currently in. (There’s no place like home… except, well, offices are gaining on homes. Keep reading.) Since distressed multifamily plays have died down, Cedar Street has seen more opportunities to pick up struggling assets in retail and office, in both urban infill and suburban locations. But that doesn’t mean the market’s not competitive. New equity is flowing, with a variety of local and national pop-up funds and money managers looking to enter Chicago at a discount, Alex says. Over at the company’s 10-building FLATS CHICAGO apartment portfolio, construction’s coming to an end, and all units should be online in the next few months, he tells us.