By Ryan Ori
March 25, 2014
The maker of Sharpie and Paper Mate pens inked an office lease for some of the former Sara Lee Corp. headquarters space in Downers Grove.
Pen maker Sanford L.P., a division of Atlanta-based Newell Rubbermaid Inc., signed a full-floor lease for 55,874 square feet at Esplanade II, 3500 Lacey Road, a Newell Rubbermaid spokeswoman confirmed. That’s about half the space it currently leases in Oak Brook. The lease is for a little more than five years, with Sanford planning to move from Oak Brook offices in June, the spokeswoman said.
For Esplanade II’s owners, Itasca-based Hamilton Partners Inc. and Washington, D.C.-based Multi-Employer Property Trust, the deal is a key step toward overcoming the loss of Sara Lee, which has vacated most of the 13-story, 637,000-square-foot tower. Meat spinoff Hillshire Brands Co. moved to a 230,000-square-foot building in the West Loop in December 2012.
Including several smaller deals, the Sanford lease brings Esplanade II up to 75 percent leased, according to real estate data provider CoStar Group Inc. A Hamilton Partners executive declined to comment.
Sanford is leaving behind an entire three-story, 120,156-square-foot building at 2707 Butterfield Road in the Oak Brook Office Center, for which it has a lease through 2021. Sanford is the largest tenant in the four-building office complex, which Vancouver, B.C.-based Adventus Realty Trust bought for $33 million in March 2013.
SEEKING TO SUBLEASE
Newell is now seeking tenants to sublease the space, the spokeswoman said.
It’s unclear why Sanford is moving with so much remaining term on its lease, but it could be an opportunistic play for higher-quality space.
“It’s really a step up in terms of buildings,” said broker Don Wenig, a principal at Chicago-based Blackacre Advisors LLC who is active in the western suburbs but was no involved in the Sanford deal.
“It’s truly a Class A building,” Mr. Wenig said. “Even though it originally was a single-user building, it’s a much more efficient floor plate than where they are. There’s a lot of vacancy in the market, but there hasn’t been new construction in several years. Larger users will see a building like this as a potential opportunity to upgrade.”
The single-floor layout will be designed for better collaboration among its 180 employees, the spokeswoman said. Sanford will move its research-and-development technology center to Downers Grove from Oak Brook.
“This facility remains as the nerve center for product development for some of the company’s most widely recognized, global brands including Sharpie, Paper Mate and Expo,” she said.
About 20 jobs were moved to Atlanta from Oak Brook as part of a consumer marketing center announced in August, the spokeswoman said.
Newell Rubbermaid’s writing unit had more than $1.7 billion in net sales in 2013, down 1 percent from the previous year, according to a filing. The unit’s operating income was $389.9 million, a 16.4 percent increase from 2012.
Sanford’s sublease space in Oak Brook could be a tough sell, considering overall suburban vacancy of 24.3 percent in the fourth quarter and 20.8 percent vacancy in the eastern east-west corridor, which includes Oak Brook, according to Chicago-based Jones Lang LaSalle Inc. The complex also has fewer than four parking spaces for 1,000 square feet, a low ratio, Mr. Wenig said.
But it offers tollway signage and is one of just eight options in all of the western suburbs for tenants seeking blocks of more than 100,000 square feet, he said.