Crain’s chicagobusiness.com – February 13, 2008

Loyola Buys Property Adjacent to Water Tower Campus

CHICAGO — Loyola University Chicago is buying a small commercial building and adjacent parking lot at the northwest corner of Chicago Avenue and State Street for about $40 million.

The acquisition, which is expected to close this week, would give Loyola a 61,470-square-foot site that could be used in future years for expansion of its Water Tower campus.

The parking lot is being sold by the YMCA of Metropolitan Chicago, which has its headquarters in an adjacent building that includes the Lawson House, 30 W. Chicago Ave., a single-room occupancy hotel. The four-story apartment and retail building next to the parking lot is being sold by a private investor.

A spokeswoman for the YMCA says the sale is part of ongoing efforts to sell off excess properties to build up the organization’s endowment and make investments at key facilities throughout the Chicago area.

“We’re looking (to sell) properties with low mission value and high real estate or market value,” the spokeswoman says. “We had kind of good luck stumbling upon this . . . They (Loyola officials) were interested, and we sat down and had a conversation and came up with something that sounded fair.”

Wayne Magdziarz, a Loyola real estate executive, could not be reached for comment. Chicago-based Newcastle Ltd. represented Loyola and both sellers in the transaction. Newcastle CEO Michael Haney declines to comment.

Loyola has several buildings just to the east that are part of the school’s expanding Water Tower campus, including a new high-rise dorm and student center at 26 E. Pearson St. that opened in 2006. The site at Chicago and State is adjacent to Loyola's Water Tower campus, which stretches from State Street to Michigan Avenue along Pearson Street, one block north of Chicago Avenue. The campus includes the graduate school of business, 1 E. Pearson St.; a high-rise dorm and student center, 26 E. Pearson St. that opened in 2006; the law school, 25 E. Pearson St., and Lewis Towers, 820 N. Michigan Ave., which houses the university's art museum.

Loyola is also expanding its Lake Shore campus on the Far North Side and adding new residential buildings there, as part of a $300-million capital campaign.

With about 15,500 students, Loyola should enjoy lower borrowing costs than it has in past years thanks to the school’s improved finances and enrollment that’s risen more than 40% since the early 2000s. Moody’s Investors Service last March raised the long-term credit rating of Loyola’s bonds one level, affecting about $249 million of debt.

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