United Airlines Headquarters SUBURBAN CHICAGO 66 ACRES Outstanding Redevelopment or Reuse Opportunity Short-Term Leaseback Offered Exclusively by
o f f e r i n g Jones Lang LaSalle is pleased to present for sale the former world headquarters of United Airlines. The Property, located at 1200 East Algonquin Road in northwest suburban Chicago, consists of approximately 66 acres of land and is currently improved with over one million square feet of office and data center space. It s large size and prominent location near O Hare International Airport represents an exceptional infill redevelopment opportunity with immediate cash flow in the form of a shortterm leaseback from United Airlines. 2 www.joneslanglasalle.com
p r o p e r t y l o c a t i o n Located in unincorporated Cook County, Illinois, the Property is approximately 22 miles northwest of downtown Chicago near Mount Prospect and Elk Grove Village. It offers direct access to downtown and the surrounding suburbs via the Northwest Tollway (I-90) with two interchanges located less than two miles from the site. The Illinois Department of Transportation (IDOT) is planning to enhance the I-90 and Elmhurst Road intersection south of the property to a full four way interchange, substantially improving eastbound interstate access to the area. Additionally, O Hare International Airport is located just four miles southeast of Property. O Hare is the second busiest passenger airport in the world and the second busiest cargo airport in the United States. 3
p r o p e r t y d e s c r i p t i o n Situated on 66 acres of land, the Property is currently improved with four office/training buildings ranging from two to eight stories, an underground data center, several surface parking lots and amenities such as a large pond with walking trails, tennis courts, a recently updated cafeteria and a pool. The existing buildings have floor-to-ceiling windows and several interior atriums allowing natural light to penetrate the space. The wide column spacing is ideal for a variety of build-outs including office, training and classroom uses. The Property includes a 110,000 square foot fully functional underground data center that is currently in use as United s primary data center. It includes more than 25,000 sqare feet of raised floor, redundant power from two separate ComEd substations and back up power from multiple generators. Additionally, the site is located within two blocks of the ComEd substation at the corner of Algonquin and Busse. According to ComEd, this is the highest capacity substation in the Chicago area on their grid. Surrounding uses include residential to the north, industrial to the south and east, and retail/office/medical to the west, including Northwest Community Hospital. With the exception of residential, which is not favored by Elk Grove Township, any one of these uses is feasible given the current building layout and estimated 3,000 parking spaces. Utilities to the site are abundant. The campus is served by two separate ComEd substations for electricity, AT&T for their data service (Level 3, adjacent to the Property, is also a provider), Illinois American Water, Cook County sewer, Nicor gas and Elk Grove Township fire protection. The Property enjoys excellent access and visibility along heavily trafficked thoroughfares, with over 2,300 feet of frontage on Algonquin Road and Dempster Road and 1,800 feet of frontage on Linneman Road. Access to the Property is available at multiple points from all three thoroughfares, including signalized intersections at Algonquin and Dempster on Linneman. This incredible access and visibility, combined with the large size of the Property, create a unique infill redevelopment opportunity with immediate cash flow to support the Property through the planning and entitlement process. The excellent location and large size of the Property afford a wide variety of redevelopment scenarios. Recent architectural studies commissioned by United Airlines show that the Property can support up to 894,000 square feet of industrial development. Alternatively, the Property can be developed into a mixed-use business park supporting up to 450,000 square feet of office and light industrial space with several retail outlots, all set in a park-like environment by maintaining the current pond and walking trails. BUILDING GROSS ABOVE-GRADE BELOW-GRADE PERCENTAGE YEAR(S) BLDG AREA BLDG AREA BLDG AREA BELOW GRADE CONSTRUCTED North* 248,392 SF 193,120 SF 55,272 SF 22% 1967, 1980 Underground Data Center 110,000 SF 100,000 SF 100% 1987 South 505,353 SF 315,648 SF 189,705 SF 38% 1961 Training Center 8-Story Portion 128,572 SF 110,832 SF 17,740 SF 14% 1966 2-Story Portion 85,228 SF 72,336 SF 12,892 SF 15% 1961 TOTALS: 1,077,545 SF 691,936 SF 375,609 SF 4 www.joneslanglasalle.com *includes 50,000 square foot operations control center
d e v e l o p m e n t o p p o r t u n i t y PARCEL SIZE (Acres) MUNICIPALITY ZONING ALLOWED DEVELOPMENT 1 5 2 56 3 5 Unincorporated R-7 General Medium density residential Cook County Residence District Unincorporated C-7 Office/Research Large office and Cook County Park District light industrial buildings Village of R-4 Multi-Family Medium- to high-density Mt. Prospect Residence District multifamily residential TOTAL: 66 ACRES 5
r e a l e s t a t e m a r k e t STRATEGIC LOCATION The Property is located in northwest suburban Chicago, a thriving hub of office and industrial activity driven largely by the proximity to O Hare International Airport. The O Hare office market is one of the largest and most active suburban markets surrounding Chicago. It accounts for over 14% of the total suburban office inventory in the Chicago Metropolitan Area. The industrial market surrounding the Property also benefits from its proximity to O Hare, which is the second busiest cargo airport by value in the United States. As a result of O Hare s strategic location in the continental U.S. more than 1.7 million tons of cargo passes through this major hub each year. Chicago is the nation s busiest rail hub and the largest intermodal container handler in the Western Hemisphere. Twenty-nine percent of North American industry is located within one-day truck delivery and forty-two percent of North American consumers are located within two-day truck delivery. The Property s easy access to the Northwest (I-90) and Tri-State (I-294) Tollways and the Dwight D. Eisenhower Expressway (I-290) offer linkages to downtown Chicago, the surrounding suburbs and the entire Midwestern U.S. The O Hare retail market consists of approximately nine million square feet of space with a vacancy rate of only 6.7%, compared to 9.0% for the total Chicago retail market. Algonquin Road is a major thoroughfare running parallel to the Northwest Tollway through the northwestern suburbs. There is a significant amount of retail development along Algonquin starting at the western boundary of the Property and stretching several miles to the west. Additionally, Elmhurst Road, located just east of the Property, is a major north-south retail thoroughfare that runs from the western boundary of O Hare to the north through the Village of Mount Prospect. INCENTIVES The Property may be eligible to receive a Class 6b classification to reduce real estate taxes for new industrial development. It may also be possible to establish a Tax Increment Financing (TIF) district for the Property to encourage office or retail redevelopment. DEMOGRAPHICS The surrounding area is a stable, upper-middle class community with median household income well above that of the City of Chicago and Cook County. Within a five-mile radius of the Property, 68% of the housing units are owner occupied and 70% of the population is employed in white collar jobs. DEMOGRAPHICS 1-MILE 3-MILE 5-MILE Population 20,915 99,454 241,551 Households 7,969 38,597 94,662 Median Household Income $60,100 $69,850 $70,600 Spending Power $186,200,00 $1,058,600,000 $2,675,400,000 Source: Site to Do Business, U.S. Census Bureau 6 www.joneslanglasalle.com
s a l e l e a s e b a c k SALE-LEASEBACK INFO During it's transition to new facilities, United Airlines will need to lease back the facility for three years with a oneyear renewal option. While United is willing to take on tax and operating expenses for the majority of the campus, they will only occupy and leaseback the underground data center and north building. Approximately 12 acres of land on the western edge of the site is available for immediate development. The chart below details the proposed cash flows from the leaseback. This is a unique opportunity for a buyer to plan the redevelopment of the site and obtain entitlements while receiving income on the property for the next three years. The immediate positive cash flow and the long-term redevelopment potential give the buyer maximum flexibility to benefit from market recovery over the next several years. ASSUMPTIONS Square Feet Total Gross... 1,077,545 SF Underground Data Center... 110,000 SF North Building... 248,392 SF South Building/Training... 719,153 SF Rental Rate (NNN) Underground Data Center... $10 PSF North Building... $5 PSF South Building/Training... $0 PSF CASH FLOWS RENT Year 1 Year 2 Year 3 Total Underground Data Center $1.1M $1.1M $1.1M $3.3M North Building $1.25M $1.25M $1.25M $3.75M South Building/Training * $0 $0 $0 $0 TOTALS: $2.35M $2.35M $2.35M $7.05M * United Air Lines will pay taxes and operating expenses only on the South Building and Training Center. United reserves the right to use this space in the future at no additional cost. 7
c o n t a c t i n f o For more information on this opportunity, please contact: Jim Postweiler David Matthews John Roberson jim.postweiler@am.jll.com david.matthews@am.jll.com john.roberson@am.jll.com +1 312 228 2 6 61 +1 312 228 3 0 5 6 +1 312 228 24 81 Dan Mcgillicuddy Patrick Rippe dan.mcgillicuddy@am.jll.com patrick.rippe@am.jll.com +1 312 228 3 9 35 +1 312 228 2066 Jones Lang LaSalle Americas, Inc. 200 East Randolph Drive Chicago, Illinois 60601 Disclaimer. This document was prepared only for the purpose of providing information about the subject Property and should not be construed as a binding offer to sell the Property. This document, the Offering Brochure, and the sale offering may be amended or withdrawn at any time without notice. Although information has been obtained from sources deemed reliable, neither the Property owner, nor Jones Lang LaSalle, and/or its representatives, brokers, or agents make any guarantees as to the accuracy of the information contained herein, and offer the Property without expressed or implied warranties of any kind. 2009. Jones Lang LaSalle. All rights reserved.