Inland Real Estate, PGGM to Develop Power Center in Chicago
- Sep 12, 2014
Inland Real Estate Corp. and Dutch pension fund advisor PGGM are making another move with their four-year-old joint venture, teaming up with local partners IBT Group L.L.C. and Pine Tree Commercial Realty L.L.C. to develop Pulaski Promenade, a 133,000-square-foot power center on Chicago’s southwest side.
It’s all about location, and the center’s future site on Pulaski Road near I-55 offers location with a capital L. “Retailer demand for space at Pulaski Promenade is driven by the dense population and immense amount of traffic in the area,” Scott Carr, chief investment officer for IRC, told Commercial Property Executive. “The immediate trade area is under-retailed, and represents a prime opportunity for value-oriented, necessity-based retailers to serve an untapped customer base.”
Pulaski Promenade will sprout up on a nearly 11-acre vacant parcel of land that the partnership acquired this month following six years of legwork by IBT Group. The project is creating a great deal of buzz; already, it is 80 percent pre-leased, with the likes of Marshalls, Ross Dress for Less, Michaels, PetSmart and Shoe Carnival having signed on.
“Excluding the nearby Target and Pete’s Fresh market, the nearest comparable retail is over three miles away, which in a dense urban setting requires a great deal of drive time in stop and go traffic,” Carr explained. “Pulaski Promenade will benefit the community by making everyday goods more accessible, and the retailers readily recognize the strength of this trade area.”
Construction is on track to commence in October, and reach completion in time for stores to open their doors to shoppers in spring 2016.
Even as the IRC-PGGM joint venture and the IBT-Pine Tree team are getting started on Pulaski Promenade, the team is wrapping up another project, the 92,500-square-foot Evergreen Promenade in Evergreen Park, about 15 miles south of Chicago. Pulaski Promenade and Evergreen Promenade mark the only two development projects within the IRC-PGGM joint venture, and will ultimately be added to the portfolio of acquired assets, Carr noted. With the joint venture almost fully invested, the partners are focusing on stabilized assets to round out the portfolio.
For IRC’s part, engaging in joint venture developments and acquiring stabilized assets in its upper Midwest and Southeastern target markets is part of its two-pronged plan. “Our strategy is to enhance the yields of stabilized assets with the higher yields of development assets to provide our investors an avenue for growth with a higher blended return on investment,” Carr concluded.