Chicago Illinois Real Estate Blog

Steve Poulos’ laid-back nature is sure to be tested this year as he works to find tenants for developments and woo investors for a new fund.

Bridge Development Partners LLC, which Mr. Poulos co-founded nine years ago, has spent the past several years building projects but now is nearly halfway to its goal of amassing $60 million to buy office and industrial properties.

“We’ve been developing the last three or four years because that’s where the value was,” says Mr. Poulos, 40. “There hasn’t been a lot of buying opportunities.”

But as Chicago-based Bridge joins the herd angling to become vulture investors, the small development real estate firm firm has space to lease in several speculative projects launched last year as the economy worsened and rival developers were retrenching.

One of them is 555 Corporate Center, a 162,000-square-foot office building in north suburban Lincolnshire to be completed in June. Bridge scored a loan and started construction on the property last summer, even as its rivals struggled to find tenants for completed office projects.

Working in Bridge’s favor is the relative strength of the north suburban office market. Its vacancy rate, excluding sublease space, was 14.4% in the first quarter, compared to 21.7% for the O’Hare submarket and 18.8% for the northwest suburbs, according to CB Richard Ellis Inc.

A lack of competition also should help Bridge; the building is the only Class A office property under construction in the area.

“The fundamentals might suggest they have a better opportunity,” says Steve Steinmeyer, an executive vice-president with Chicago-based Jones Lang LaSalle Inc. “But in this market, who knows?

The company also has a lot of space to fill at recently completed industrial projects in Aurora and Buffalo Grove and a soon-to-be-completed complex in Woodridge. Bridge has signed one tenant and is close to two others, which would fill 25% of the 412,277-square-foot, two-building Park Butterfield complex near Butterfield and Eola roads in west suburban Aurora. The three-building, 508,000-square-foot Aptakisic Corporate Park in northwest suburban Buffalo Grove is one-third empty.

Bridge is still looking for its first tenant for Bridge Point Woodridge, a two-building light industrial/distribution facility near Davey and Lemont roads in the southwest suburb. The nearly 385,000-square-foot complex is to be completed this summer.

Meanwhile, Mr. Poulos says he hopes to finish raising money from institutional and private investors and complete his first deal by year’s end. Bridge plans to buy properties in suburban Chicago and Miami whose owners are forced to put them up for sale because they can’t pay off or refinance debt. Mr. Poulos says his firm will target industrial properties priced at $10 million to $30 million and office buildings up to $20 million.

Bridge, which doesn’t disclose revenue, employs eight people in offices in Chicago, Oak Brook and Miami, where it opened a branch last year. Mr. Poulos started the firm in 2000 with Ronald Frain, 66, former chairman of Chicago-based real estate brokerage firm Frain Camins & Swartchild.

Mr. Poulos, who grew up in Des Plaines, joined Frain Camins & Swartchild in 1991 after earning an economics degree from the University of Wisconsin.

“I took him under my wing when he was young,” Mr. Frain says. “I could sense he was a guy who had terrific instincts and was good at sniffing out a deal.”

Mr. Poulos left the firm FC&S in 1997 when it was sold to Insignia/ESG Inc. He worked for three years in the local office of Cleveland-based developer Pizzuti Cos., an experience he credits with helping hone his development skills.

Mr. Poulos, who lives in Barrington with his wife and three children, is a “relaxed, easygoing guy,” says Jeff Galante, a principal at Lee & Associates of Illinois LLC, the Chicago-based affiliate of the California-based commercial real estate firm that’s handling leasing for Bridge Point Woodridge. “That suits the development game well because things don’t always go your way.”

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