The cost to rent a retail space in downtown Des Plaines has been reduced, according to a spokesperson for the property owner. World Class Capital Group acquired the Metropolitan Square retail and office space development through foreclosure, it announced in May 2012.
Since that time, the cost to rent a retail space or space in the medical office building was lowered, more in line with current market value, said Matt Kurucz, asset manager at World Class Capital Group. He said as tenants leases come up for renewals, they are lowering the cost to be in line with current market value.
“These deals were all struck in 2007 when the market rent was a lot higher, and we recognized that,” Kurucz said. “So we came back and we cut deals and renewals at market rents today.”
Kurucz said a number of the tenants recently signed new long-term leases, including the largest tenant in the medical office building. The current occupancy rate of the building is 75 percent, he said.
“We’d like it to be a little bit higher, but the more important story is that we just got a commitment from the tenant that takes the entire third floor for another five years,” Kurucz said. “So they’re sticking around.”
The total shopping center is currently 64 percent occupied, Kurucz said.
“We hope to achieve 80 to 85 percent occupancy by the end of 2013,” Kurucz said.
Kurucz said, in February, negotiations with a new gym to occupy the entire southwest side of Metropolitan Square were in progress.
Kurucz said they were still working on the details of the lease with the potential gym tenant, and he was next going to give them another draft of the agreement to review.
“The earliest I think that gets done is probably another week or two,” Kurucz said. “There were a lot of lease comments, so it’s going to take time to work through.”
. But Kurucz said the gym was key to attracting more new tenants.
“I think it’s going to take the gym being constructed to convince people, hey, they are filling some of the holes,” Kurucz said.
He said an occupancy rate of 85 percent was considered good within his industry.
“Assuming we get the gym under lease, that will bring the occupancy to 73 percent,” Kurucz said.