After 30 years as the successor to what was once the tallest building in the world, Sears’ headquarters at Hoffman Estates will get a new goal this year as soon as the sprawling property goes up for sale.
The party or parties that take on this assignment will need two things: a sum of money acceptable to the owner Transformco – the company that emerged from the bankruptcy of Sears Holdings – and an idea compatible with the vision of those responsible at Hoffman Estates.
The aesthetic of the campus’s 2.4 million square feet of office space is well known in the commercial real estate world, as are the 120 undeveloped acres that surround it.
But as village officials consider their preferences and the options a buyer can bring them, they focus less on existing buildings and more on identifying an experienced master developer with a well-designed plan.
Mayor Bill McLeod, Village Manager Eric Palm and Director of Economic Development Kevin Kramer say even the timing of the early stages of the process is difficult to predict. But for various reasons, they believe that a final plan is unlikely to be in place by the end of the year.
The size and location of the site makes it a very different perspective from the ongoing redevelopment that transforms the former AT&T headquarters off Interstate 90 and Barrington Road into the Bell Works Chicagoland âmetroburbâ of combining offices, multi-family residences, restaurants, shops and entertainment.
The Sears site totals 273 acres, nearly twice the size of the 150-acre Bell Works property.
Kramer said anything that isn’t an image on a map makes it difficult to convey the amount of land in play on the Sears campus. He thinks he probably won’t get as many calls as he does for AT&T property.
âWith something this size it’s going to take more creativity,â he said.
One of the biggest questions about the future of property is how long it will take to find an interested buyer, said Jack Reardon, senior vice president of Oakbrook Terrace-based commercial real estate firm NAI Hiffman.
âWe are in the midst of a pandemic,â Reardon said. “I couldn’t imagine a worse time to try to sell 2.4 million square feet of office space.”
Having found tenants for some of the vacant space on campus in the past, Reardon said the facility’s amenities are amazing both inside and out.
But the site is several minutes further west on I-90 from Bell Works. The two old campuses once accounted for about a sixth of the total office space in the northwestern suburbs, Reardon said. And the market was not absorbing office space quickly, even before the pandemic.
The next site owner will inherit an estimated annual cost of $ 7 per square foot for property taxes and facility maintenance – about $ 16.8 million per year, Reardon said. A buyer hoping to keep the office’s current use would have to lease at least a quarter – 600,000 square feet – just to break even, he added.
Reardon called marketing the Sears site “the biggest challenge for any broker.”
Colliers International is that broker, but he referred all requests for comment to Transformco, who did not respond.
What is not yet known is exactly when the property will be listed and how much Transformco will ask for.
Past speculation about other uses of the Sears campus has involved an educational institution or a mall, but the market would not favor either at this time, Reardon said. He suggested – only half-jokingly – that the site is more likely to become an organic farm than a mall.
The industrial market is hot right now, but Reardon said he didn’t know how open village officials would be to it. An architect would know better than him if it would be possible to keep one of the existing structures for industrial use, he said.
The proximity to Prairie Stone Business Park and Now Arena to the east made residential development unlikely, according to Reardon.
Palm said the village will be open to a residential component of the property, as has been the case in the past, but he agrees that this is unlikely to be the predominant future use of the Sears site.
He also said the village would be much more open to light industrial uses than something that would make the site a hub of heavy trucking activity as currently seen along Interstate 55.
McLeod stressed that he sees the prospect of new interest in the site as an opportunity for the village.
âLet’s see what ideas people have,â he said.