CIM Buys Chicago’s Block 37 from BoA

CIM Group, the Los Angeles-based real estate fund, has closed on Chicago’s troubled Block 37 development. The fund purchased the property from Bank of America for a reported $84 million.

By Nicholas Ziegler, News Editor

The Block 37 site as it appeared in 2008. Image courtesy Flickr user chascarper

CIM Group, the Los Angeles-based real estate fund, has closed on Chicago’s troubled Block 37 development. The Downtown Loop-area shopping mall, located directly across the street from Macy’s State Street, the second-largest department store in the nation, is a five-story retail center that has been struggling to gain traction.

In March 2011, the Block 37 development sold for $100 million at auction, with the winning bid going to Bank of America. BoA was among the lenders that foreclosed on developer Joseph Freed & Associates just before it was slated to open in 2009. At the time, the developer was estimated to have defaulted on more than $200 million in debt.

Sources put CIM’s purchase at approximately $84 million.

The 275,000-square-foot retail center currently has a few tenants, including Anthropologie, Sephora, Disney and Magnolia Bakery. But most of the available space remains empty, with the current tenants taking only 30 percent of available inventory. In a press release, CIM noted it “plans to lease the balance of the building to national and local retailers.”

The site was named for one of the original Chicago city blocks established in 1830, and has remained primarily a retail center throughout the years.

CIM has been busily working on retail across the country and is no stranger to controversy. In early March, the developer completed construction of the 330,000-square-foot Midtown Crossing project in Mid-City Los Angeles that sits on 11 acres. During the project’s timeline, however,some residents were unhappy with the complex’s big-box elements, claiming that the developer ignored requirements by the Los Angeles Planning Commission, while CIM maintained that it followed all guidelines.