Patriot Warrenville Road, Downers Grove, IL

Challenge

In 2001, Philadelphia-based Aramark Corporation acquired ServiceMaster Management Services to expand its facility services capabilities.  With the merger came all of ServiceMaster’s real estate, including a two building, 250,000 square foot campus in Downers Grove, IL that overlooks Chicago’s East-West Tollway (I-88) and North-South Tollway (I-355).  Aramark operated these two buildings as its Midwest Regional Headquarters subsequent to the merger.

Fifteen years later, Aramark was not fully utilizing the buildings, and had backfilled into a portion of one. Aramark had, however, been successful in completing some third-party leasing.  Approximately 50% of the campus was occupied by Sentinel Technologies and Addus HomeCare.  Aramark no longer wanted to play the role of landlord but did want to retain many of the catering and conferencing services it offered for its company regional events as well as to other tenants at the property.

Solution

Patriot acquired the property and leased back over 38,000 square feet to Aramark for twelve years.  Patriot and Aramark delegated which facility management roles Aramark would strategically retain, including catering and conferencing services, and which Patriot would fully take over.  Aramark efficiently monetized the assets, providing a cash flow injection into its core businesses.

During the due diligence period, Aramark and Patriot worked together to lease a portion of the vacant space to Hirose Electric, a Japanese technology firm who had recently expressed interest in the property.  The cohesive execution between seller and buyer allowed Aramark to receive more money for its assets and gave Patriot a stream of cash flow over a long-term commitment from a budding international company.

Result

Patriot was attracted by the current tenants’ extensive history and satisfaction with the buildings, and has seen this trend continue since ownership.  Sentinel Technologies, which has been at the property since 1993 and had approximately 6.5 years left on its lease for 71,000 square feet, recently agreed to extend an additional five years in exchange for capital improvement funds to further upgrade their space. 

The buildings are currently performing at stabilized occupancy with a weighted average lease term in excess of ten years.