Slate Office REIT drops $20M on Pfizer-leased building

A Toronto-based real estate investment trust has agreed to drop $20 million on an occupied office property in Lake Forest.

Slate Office REIT is under contract to buy the 197,500-square-foot office building at 275 North Field Drive in the North Shore suburb, Crain’s reported. The building is owned and occupied by pharmaceutical giant Pfizer. The deal follows the trend of real estate investors snatching up properties with secured cash flows with long-term tenants .

Pfizer agreed to a long-term lease for a majority of the four-story building, located near Interstate 94, as part of the $19.8 million purchase agreement with Slate. The pharmaceutical company bought the property in 2015, which was the previously headquarters of fellow pharmaceutical company Hospira.

There is also 65,000 square feet of available space that Slate can lease out to an additional tenant.

Mum was the word in Slate’s announcement of the deal. The firm didn’t identify the seller or the exact location, but did say the property is “anchored by a long-term lease with one of the world’s premier innovative biopharmaceutical companies,” according to Crain’s, which was able to identify Pfizer as the seller.

The sale price is expected to generate an 8.4 percent capitalization rate, meaning Slate is expected to generate income equal to that percentage of its purchase price. In the first year of ownership, Slate would bring in almost $1.7 million at that rate.

The deal adds to the trend of investors buying office properties with long-term anchor tenants. To the south, Tennessee-based Montecito Medical Real Estate paid nearly $30 million for an occupied office building at 5400 Pearl Street, near O’Hare International Airport. ACL Laboratories, a subsidiary of Advocate Aurora Health Lab testing, has a lease agreement in that building for the next 10 years.

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— Victoria Pruitt