Acadia Takes Majority Stake in Chicago High-Street Retail Property
- Dec 08, 2014
Acadia Realty Trust has added a high-street gem to its core portfolio with the acquisition of an 88.4 percent stake in 840 N. Michigan Ave. in Chicago. The REIT acquired the majority interest in the 87,000-square-foot -property, located along the Miracle Mile of the city’s tony Gold Coast area, for $144.3 million.
Acadia financed the purchase with cash, operating partnership units and the assumption of $48.6 million of pro-rata debt, and is now partners with four of 840 N. Michigan’s original developers: CBRE|U.S. Equities Realty’s Nancy Pacher, Camille Julmy, and Bob Wislow and Doris Holleb.
Occupying a prime corner parcel that was once the site of the Bonwit Teller Building, the freestanding four-story retail structure at 840 N. Michigan was constructed at a cost of $35 million in 1992 and pre-leased as flagship space for Escada, FAO Schwarz, and Waterstones Booksellers. Today, the fully occupied property is home to European fashion retailer H&M, which recently expanded and renewed its lease, and Verizon, which just opened its new two-level 10,000-square-foot Destination Store in November.
“Following the successful completion of this most recent re-tenanting, we felt that the time was right to recapitalize,” Camille Julmy, vice chairman of CBRE Inc., noted in a prepared statement. “Given its complementary, high-street portfolio and extensive footprint in Chicago’s Gold Coast and Lincoln Park neighborhoods, Acadia was a natural choice as our majority partner.”
CBRE|U.S. Equities Realty, the merged Chicago operations of CBRE Group and U.S. Equities Realty, will manage the property along with Acadia.
Acadia focuses its core portfolio activity on high-barrier-to-entry, irreplaceable retail assets, and the REIT has been quite acquisitive this year. Including the stake in 840 N. Michigan, its core purchases for 2014 now total nearly half-a-billion dollars. Other notable acquisitions include the 3,200-square-foot street retail co-op unit at 131-135 Prince St. Manhattan, picked up for $51.4 million.