In March of 2013, Alliance acquired Burnham Center, a 580,000 square foot office building in Chicago, Illinois, from an investment group seeking to close out their fund. When Alliance purchased the asset, the building was 76% leased, with 140,000 square feet of vacancy. As such, the property did not meet the investment profile for most stabilized investors, and was too large for many “value-add” investors. Thus, Alliance saw an opportunity to apply both its capital and hands-on, redevelopment experience to add value to the opportunity.
Burnham Center was well-located and had a classic exterior (as designed by Daniel Burnham) but was in need of significant capital improvements, amenity upgrades, and aggressive leasing efforts. The current tenant roster consisted primarily of law firms, however, Alliance sought to attract, younger, tech-focused companies while maintaining and growing its tenant roster of legal and financial service firms. As such, it set out to maintain the old-world classic vibe of the asset while introducing a “cool” industrial modern vibe to its new spaces.
Alliance invested significant efforts into cleaning and maintaining the building’s historic façade, upgraded common areas (hallways, elevator cabs and lobby), and investing in amenities such as a brand-new state-of-the-art gym and locker facility, bike rooms, spec suites and an interactive conference facility. Alliance worked with JLL’s leasing team to re-brand the building as “Iconic. Cool. Reimagined.” and targeted the brokerage and tenant community with marketing events, videos and other collateral to help build awareness for its efforts.
These efforts led to over 75,000 square feet of new leases in less than 18 months from acquisition, bringing the building to 91% leased (from 76%). Alliance intends to continue to improve occupancy and hold this asset as a long-term, cash-flowing investment.