S
tahelin Properties is looking to sell its 140,000-square-foot Crossroads Executive Centre located at 3601 Algonquin Road in Rolling Meadows near Woodfield Mall. The property has been listed at $7 million or $50 per square foot, as reported by Crain’s. The 10-story office building is being marketed by Adam Johnson and Tom Gnadt of NAI Hiffman. Despite the challenges faced by the firm due to changing work patterns and evolving office market trends, Stahelin hopes to sell the building to pay off its $6.6 million loan from Heartland Bank & Trust, which was refinanced in 2022.

    Built in 1972 and last renovated in 1998, the property is currently 63 percent leased, which is significantly below average for suburban Chicago offices. With an increasing number of companies embracing remote work and downsizing their office spaces, Class C properties like Crossroads have been hit particularly hard. However, NAI Hiffman believes that the property has potential due to its projected cap rate of 9 percent, offering a strong yield with significant upside potential.

    Many of the building’s tenants occupy just over 1,600 square feet each, with some having remained at the property for over a decade, what Gnadt refers to as “stickier tenants.” Despite this, the suburban office market remains challenging, with companies cutting back on nearly 4 million square feet of office space in the region since 2020. This has resulted in an unprecedented availability of suburban office space, reaching a record 31.3 percent earlier this year. This trend has been marked by 14 consecutive quarters of increasing vacancy, according to JLL.

    In response to these challenges, some developers have explored converting older office buildings into other uses. For instance, a nearby office building at 3800 Golf Road is set to be demolished to make way for industrial development, while outdated offices in Elk Grove Village are being transformed into data centers.