10 Things You Didn’t Know About NAR’s $1.45 Million Purchase

NAR's purchase of the 437 N Rush building gives the association control of an entire block of real estate.

The National Association of Realtors (NAR) announced earlier this week its purchase of 437 N Rush, a two-story building that borders the west side of the association’s Chicago headquarters off Michigan Avenue.

NAR will now own the entire block on which its office sits, and for more details about the transaction, we spoke with Doug Hinderer, NAR’s senior vice president.

  1. 437 N Rush was previously owned by the Wrigley Company.
  2. The deal, which was for $1.45 million, was conducted with Phil Hoffer of GNP Realty representing NAR and Bruce Miller of Jones Lang Lasalle representing the Wrigley Company.
  3. GNP normally represents NAR in its real estate dealings, considering it has a long-standing relationship with the association and is the management company in charge of its headquarters.
  4. There were no commissions involved in the deal; both brokerages were independently compensated by the parties they represented.
  5. The purchase was an all-cash transaction.
  6. The building will not result in any direct financial benefit to members, at least in the form of reduced membership dues or refunds.
  7. The true benefit, Hinderer explained, is in how the new building “enhances the equity and value” of NAR’s headquarters, especially that it prohibits any speculative development of the lot that could negatively impact the value of NAR’s building.
  8. Also, Hinderer said the building made sense as an investment; it was better, after all, for NAR to invest in prime real estate during a downturn, rather than allow the money to sit in the bank and collect interest. “If we decide to sell in a year for a profit, people will say it was a great investment,” Hinderer said (and the building was recently appraised at $4 million).
  9. NAR does not have any near-term plans for the building. They could knock it down and expand their headquarters, or maintain the property as is and continue to collect revenue from the building’s tenants, which include the Phil Stefani’s 437 Rush Italian Steakhouse. The amount of revenue, Hinderer said, is confidential information.
  10. If NAR does ultimately decide to do something with the building, it will have been the result of a multi-tier process. First, NAR’s Building Committee, a 12-member body composed of commercial Realtors that manages NAR’s three buildings, will draft a proposal for the land; then, NAR’s Finance Committee will analyze the proposal and see if it makes financial sense; then, finally, NAR’s Board of Directors will make a final decision on the plan.

The transaction is just one of several business dealings NAR recently completed. In addition to the planned merger of its Federal Credit Union with Northwest Federal Credit Union, NAR also sold ePropertyData to DMG, the parent company of Xceligent, and purchased total ownership of SentriLock LLC.

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  • Wayne says:

    I thought the NAR told everyone home prices were on the rise.
    Also thought our special DUES ASSESSMENT was because NAR couldn’t meet payroll at the present level.
    Have these people been watching the federal government and all the spending they are doing of taxpayer dollars? Do they think they are politicians?

  • Bernie Taylor says:

    I hope the commercial real estate value they paid was WAY UNDER market value, so in the future NAR real estate holdings will be worth more than the combined dues increase for the next 20 years!

  • Jack Persin says:

    You failed to mention the current appraised value is over $4,000,000. Sounds like one heck of buy for NAR & members.
    Thanks NAR. Jack P.

  • Lyn Sims says:

    Nice the membership is the last to know. Everyone else in the industry is cutting or scaling back & NAR is purchasing prime real estate for ??? so the building is not negatively impacted? Membership is not financially impacted by this transaction? Who’s money did they use again? Cash they said!

    Did you also know that they own Sentrilock now?

    Busy, busy, busy.

  • JoAnn Sworan says:

    I second that comment made by Jack Persin. (I was just getting ready to run a CMA on the property) Congratulations NAR for a smart investment. I am proud to be a REALTOR!!
    I love the tiny investment I make into an Association that is respected by so many across the country. In this struggling economy, I still have a career!
    JoAnn Sworan
    Realty Executives, Elite
    Lemont, IL 60439

  • Kllee says:

    I’m with Wayne. Many agent brokers are having a difficult time staying alive and you increased the dues! Then you buy a building on Rush you won’t be using.

  • Kent Black says:

    We pay our dues so NAR can invest in Real Estate? Really?

    Irrespective of whether or not it will turn out to be a good investment, this is NOT what I want them doing with my dues.

    OUTRAGEOUS

    Moreover, NAR entered into a transaction that undermined the traditional commission model for the agents involved? I wonder what the commission split was.

  • Mabel Guzman says:

    In addition to the excellent value property it cash flows over $100,000- annually. Timing is everything and they did it at the right time

  • Ross Kay says:

    Although this purchase is great for our American cousins (lets face it this is about a buck a REALTOR in the U.S.) I didn’t know you guys are actually still paying dues…..ARE YOU KIDDING ME!!!

    The revenue streams available to realtor.com should now be returning cash to each NAR member, not costing anything. Zillow now worth over 1 billion and you guys are paying a dues increase???

    In “Canadianese”…”you guys are getting hosed!” if you are still paying dues!

  • Plall says:

    Typical NAR…Hosed is an understatement!

  • Wendy Adkisson says:

    I think it’s great that our REALTOR organization is investing in real estate during a down market. It’s a wonderful example to everyone out there considering a purchase. Sounds like it was a good buy, too. It’s a shame that with only partial information so many are quick to judge this as a negative occurance. I’m certain there were expert consultants and much consideration given to the pros and cons of this purchase before it was made. We have to have confidence in the leadership and their commitment to servicing us, the members. Congratulations to NAR for a smart investment!

  • Jim Haisler says:

    People, get over yourselves.

    I love to see smart investing of reserves especially when its in real estate. Really, they paid $1.45MM for a $4MM investment? Kudos to NAR! So, what’s the complaint???

  • Bruce Ailion says:

    Great to see the NAR express confidence in the once in a lifetime opportunity to buy highly distressed real estate. NAR directors understand buy when everyone is selling. Had they purchased for 4 million in 2006 the directors would have been lauded for their forward thinking and brilliance purchasing at a time when most in the market were buying believing real estate prices had only one way to go, up. Most REALTORs not buying as much as they can today will be living commission to commission 5 years from now as they are today. Buying today will likely mean 100% returns in the next 3-10 years which sure beats 2.5-3% commissions.

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