Solutions Newsletter
April 2016
From Bruce Bossow's Desk

Premier Commercial Realty is having its 25 year anniversary! I founded the exclusively commercial real estate firm in 1991 when there wasn't a lot of commercial brokerage going on in the upper Fox Valley. We gazed into the future and looked past the corn and beans in every direction and staked our careers on what was surely to come. Nobody knew us then, but now our signs are recognized everywhere.

Along with the firm's quarter century anniversary, I'm pleased to announce that Bruce Kaplan, Senior Broker Associate, is having one of his own, having been with the firm since its inception. Bruce has been an anchor at Premier, a top producer, a seasoned broker, and a friend. His loyalty and willingness to share his knowledge and experience with other agents has been appreciated.

In addition to the longevity milestones, I want to congratulate Michael Williamson for achieving the coveted CCIM (Certified Commercial Investment Member) designation. This represents the highest level of knowledge and training available in commercial real estate, and ensures a mastery of financial, market and investment analysis. This is a prestigious and hard to earn credential, and Mike is one of the youngest in the country to have it. We are enormously proud of him and know this rigorous training will earn him a lot of respect and success over his career.

Featured Properties
796 Tek Dr., Crystal Lake
12,000 SF industrial "flex" building with 55% nice office space set up for 2 occupants. 13-15' ceilings, 2 docks, 1 DID. 
Sale: $775,000  
Lease: 5,800 SF for $6.50 psf modified gross
1625 Colonial Parkway, Inverness
Office near Harper College. 5,885 SF 3-level standalone building. Easy access to I-90. 110-1,685 SF available. 
Sale:  $535,000      Lease:  $10-$12 psf NNN
8550 Ridgefield Rd., Crystal Lake
High ceilings. 12,500-50,000 SF for sale or lease. 25' ceilings, 2 shared docks. Outside storage possible. 
Sale: $2,000,000    Lease: $4-$4.50 psf modified gross
1252 Green St., McHenry
13,838 SF freestanding brick commercial building in downtown McHenry. Visible from Rt. 120. Former party/gift store. Phenomenal value! 
$325,000  ($23.49 psf)
282 W. Virginia, Crystal Lake
2,101 SF freestanding restaurant on 20,600 SF site. Zone B-2 with city water/sewer. Pizza Hut moving to carry-out/delivery only location. 
2429 Randall Rd., Carpentersville
1,123-3,712 sf available. High visibility office/retail building on busy Randall Rd. Former bank building with drive-thru. Owner will consider build out to suit. Spaces are divisible.
$10-16 psf NNN
Recently Sold and Leased
6414 Hilly Way, Cary
Former Chris' Coach House Restaurant.
Sold for $310,000 by Bruce Bossow, representing both buyer and seller.
42 East St., Crystal Lake
30,000 SF freestanding industrial building. Purchased by the Crystal Lake Food Pantry.
Sold for $700,000 by Joe Billitteri as the buyer's broker and Bruce Kaplan as the listing broker.
395 Barbara Ct., Marengo
4 unit, 3,280 SF apartment building.
Sold for $240,000 by Tina Kropke.
4901 Prime Parkway, McHenry
10,000 SF freestanding masonry industrial building.
Sold for $575,000 by Bruce Kaplan, representing both buyer and seller.
204 Northwest Hwy., Fox River Grove
7,170 SF retail showroom/warehouse.
Sold for $275,000 by Bruce Kaplan, representing both buyer and seller.
Negotiating Your Commercial Lease
by Ryan P. Farrell, Esq., CPA
Zukowski, Rogers, Flood & McArdle

One of the most exciting times for a business owner is when moving into a new space.  It can also be a time that one looks back on with the most regret.  Whether moving your business from your basement to a space that is more production friendly or simply moving from an existing space to another, negotiating a commercial lease can be one of the most important things a business owner does.  Both from a top line, especially if you are a retail owner, and a bottom line perspective, your lease has huge financial consequences for your business.

While residential leases are fairly generic and contain (either within a standard form or through state law) protections for the consumer, commercial leases are more open-ended with a lot of flexibility and are essentially caveat emptor (let the buyer beware).  That can be scary, but also provides an opportunity for a tenant to make its lease right for them.  Prior to searching for a property or negotiating the lease itself, rank your priorities - location, rent, length of term, tenant improvements, etc.  The ranking of that order will partially be dictated by the type of business you have.  A manufacturer will value having a certain amount of space and loading docks and care less about the location itself or the aesthetics of the building.  Conversely, a restaurant might care about what tenant improvements already exist in the premises or how much the landlord will agree to provide for buildout.

Q4 2015 Retail Cap Rate Trends
Ryan Severino, Reis Reports

The mean retail cap rate declined by 30 basis points during the quarter to 7.2%. Despite this, the 12-month rolling cap rate was unchanged at 7.4%.

This is the first time in about a year that the mean cap rate has fallen below the 12-month rolling cap rate, indicating some recent pricing momentum in the market and intimating that the 12-month rolling cap rate could be heading lower in the coming quarters. Moreover, the 12-month rolling cap rate remained roughly 70 basis points below the historical average of that metric. This is a bit wider than what we observed for apartment and office, although it is roughly in line with the difference from the last two quarters.

Motorola Property Update
by Bruce Kaplan, Premier Commercial Realty

The 1.52 million SF former Motorola campus in Harvard is going on the auction block, according to a Northwest Herald article on April 5. The building(s), built in 1997, has been vacant since 2003, and various brokers and Harvard officials have been trying to find a buyer, but have largely been unsuccessful.

The building is owned by Optima International, who has made a minimal investment in the property over the years, and in 2014 they reportedly stopped paying real estate taxes and heating the property. 

The property consists of a two-story 619,590 SF manufacturing building; a 355,515 SF distribution center; a five-story office building; a 2-story services building; and warehouse space, according to, the auction house that is handling the property along with broker Jones Lang LaSalle. This is a potentially huge deal for Harvard and McHenry County, and all eyes will be on this auction, which will be online April 18 to April 20. Viewing of the property will be April 15. Starting bid will be $2.7 million. Call one of our brokers if you have interest.
Q4 2015 Office Trends
by Victor Calanog, Reis Reports

National Office Market
National vacancies fell by 20 basis points in the 4th quarter, ending the year at 16.3 percent. The 20 basis point decline in vacancies is, though quite modest based on historical standards, the greatest pace of improve-ment in fundamentals for the office sector since the recovery began in 2010. Overall, vacancies fell by 40 basis points in all of 2015, suggesting that momentum in office fundamentals is building.

Asking and effective rents both grew by 0.8 percent in the fourth quarter, and by 3.1 and 3.2 percent respectively, throughout 2015. That is the best annual performance for asking and effective rents since the recession; the recovery for office properties has very much mirrored the slow growth of the overall economy, and it's a shame that now that office fundamentals appear to be improving better - we appear to be running into more economic headwinds.

Premier Commercial Realty
 industrial  | retail  | office | land 
business  | investment

 9225 S. IL Rt. 31 | Lake in the Hills, IL 

Bruce Bossow, x 12 847-732-3462
Bruce Kaplan, x 20  847-507-1759
Heather Schweitzer, x 15  815-236-9816
Joe Billitteri, x 21  847-833-5004
Joe Heffernan, x 18  847-302-5550
Kevin Kaplan, x 13  309-261-0920
Tina Kropke, CCIM, x 14  815-970-0546
Melissa Hubley, x 22  312-320-5987
Michael Williamson, CCIM, x 25  847-732-0504

Premier Commercial Realty | 9225 S. IL Route 31 | Lake in the Hills | IL | 60156