Napleton dealership family buys well-known office tower in Chicago suburbs

The family that owns the Napleton Automotive Group chain of car dealerships has purchased one of the most recognizable office properties in the Chicago suburbs.

A venture controlled by the Napleton family paid $60 million this week for the 31-story Oakbrook Terrace Tower at 1 Tower Lane in the western suburb, according to DuPage County property records and people familiar with the deal.

The venture paid all cash to acquire the 785,257-square-foot building from New York's private-equity giant Blackstone Group, which purchased it as part of a $3.3 billion portfolio acquisition from GE Capital Real Estate in 2015.

The sale comes amid an especially sluggish period for office property sales. Higher interest rates have kept would-be buyers on the sidelines, while the remote work trend has scared off many investors — key reasons that sales of suburban office buildings nationwide in the first nine months of the year were down by 60 percent from the same period last year, according to research firm MSCI Real Assets.

That precarious backdrop helped Napleton buy Oakbrook Terrace Tower at just $76 per square foot, a low number relative to what the property was worth in the past.

Renewing leases or finding new tenants to fill available space is difficult and costly today for landlords amid record-high vacancy, which is one factor that might have lowered the tower's market value.

Napleton Automotive Group, led by Ed Napleton and the 18th largest dealership group in the U.S. in 2022, according to Automotive News research, has its main office at another nearby building but could relocate it to Oakbrook Terrace Tower.

As of late last year, the tower was projected to generate net operating income of $10.2 million in 2023, according to Eastdil marketing materials.

A Napleton spokesperson did not respond to a request for comment.

A Blackstone spokesperson did not comment on the Oakbrook Terrace sale directly, but said in a statement that it is focusing on "sectors with strong fundamentals propelled by macro demand trends" like logistics properties, student housing and data centers. Less than 2 percent of the properties the company owns are a "traditional U.S. office," the statement said.

The Oakbrook Terrace Tower deal is the largest sale of a multi-tenant office building in the Chicago suburbs since May 2022.

Designed by late architect Helmut Jahn and completed in 1987 by developer Miglin-Beitler, Oakbrook Terrace Tower is the tallest building in Illinois outside of downtown Chicago. The property includes both the office tower as well as a 129,000-square-foot warehouse building at its base that was developed in 1970.