After demolishing a former Walgreens office complex north of Chicago, a real estate investment trust has sold the sprawling property for more than $13 million to a local developer that is planning a mixed-use project on the site.
Shorewood Development Group has paid $13.1 million for the 37.5-acre site on Lake Cook Road in Deerfield, Illinois, with plans for a project with retail, medical and multifamily space, according to online property records.
Orion Properties’ sale last month came after the REIT last year demolished office buildings at 1411, 1415, 1417, 1419, 1425 and 1435 Lake Cook Road to make the site more attractive to potential buyers as a blank development slate.
It is the latest example of outdated office properties giving way to new uses throughout the country. In the Chicago suburbs, that has included everything from data centers to single-family homes.
Buffalo Grove, Illinois-based Shorewood is an investor in mostly retail properties in the Chicago area and nationwide.
Specific plans for the site are unknown, and Shorewood did not immediately respond to requests for comment from CoStar News. State documents on the sale list retail, medical and apartments as planned uses.
Phoenix-based Orion Properties did not respond to a request for comment.
Realty Income Corp. acquired the six-building campus in an $85 million sale-leaseback deal with Walgreens in 2013. The Orion REIT spun off from Realty Income in 2021.
Walgreens began scaling back its office presence in Deerfield and moving workers from the Lake Cook Road campus to buildings that Walgreens owns on Wilmot Road.
The drugstore giant also sold part of the Wilmot Road campus to homebuilder Pulte Group in 2024, and late last year Walgreens said it was closing its massive downtown office in the Old Post Office.
Walgreens stopped making rent payments on the Lake Cook Road campus in August 2023, according to Deerfield village documents.
Orion Properties previously struck a deal to sell the former Walgreens campus to Chicago-based LG Development Group, which planned to replace the office structures with an entertainment district. Deerfield’s village board approved zoning for a range of uses such as live entertainment, golf driving ranges, bowling alleys, movie theaters, bars and restaurants.
But the deal with LG fell through, leading Orion to begin demolishing the office buildings last summer in a move it said would reduce carrying costs and make the property more attractive to prospective buyers. As it was demolishing the properties, CBRE brokers were hired to seek a buyer last August.
CBRE materials outlined a range of potential uses, including residential, retail, entertainment, medical office, senior housing, data center or car dealership projects.
Orion did not respond to requests for comment from CoStar News regarding the sale.
Demolition was completed in the fourth quarter of last year, CEO Paul McDowell told analysts during a call in February, according to a transcript.
The sale of the Chicago-area campus is part of a broader, ongoing effort by Orion to reshape its portfolio throughout the country.
McDowell said the REIT was seeking to shift away from suburban office properties toward “dedicated use assets” such as medical, lab, research and development, flex and government properties.
One such example was Orion’s $15 million purchase of pasta giant Barilla’s North American headquarters in north suburban Northbrook in February. That property houses the company’s lone U.S. test kitchen and R&D facility, McDowell said on the call.
“Our priorities in 2026 remain: improve portfolio quality, lengthen [weighted average lease term], renew tenants and fill vacant space, reduce risk, lower expenses, prudently manage leverage and position Orion Properties Inc. with a more stable and durable earnings profile,” he said, according to the transcript. “We believe these are the right steps to unlock long-term value, which will make Orion Properties Inc. attractive to investors and potential strategic partners alike.”
For the record
The seller is represented by CBRE brokers Tom Svoboda, Matt Ishikawa and Tony Gange.