Investors pick up former Toys “R” Us, Babies “R” Us stores in Orland Park

Key Development and Klaff Properties acquired the two sites left vacant last year by the collapse of Toys “R” Us

Feb.February 04, 2019 03:00 PM

An empty Toys “R” Us store (Credit: iStock)

Toys “R” Us sold off two more of its vacant Chicago-area stores, with two local investors paying a combined $5.5 million for the shuttered retail properties in the southwest suburban Orland Park.

Key Development Partners on Jan. 22 paid $4.3 million for the former Toys “R” Us store at 45 Orland Square Drive, according to Cook County property records. On the same day, Klaff Realty Partners closed on the Babies “R” Us store at 15820 South 94th Avenue for $1.25 million, records show.

The 4,000-square-foot Toys “R” Us store is just outside Orland Square Mall and was being marketed as a redevelopment opportunity, according to LoopNet. The former Babies “R” Us store is in a shopping center a few blocks north of the mall.

Buying the former Toys “R” Us is Key Development Partners, a Chicago-based commercial development group. The firm is led by Steve Panko, who in 2009 was hit with foreclosure suits on two of his suburban retail developments, Crain’s reported at the time. (The suits were filed against another of Panko’s ventures, not Key Development Partners.) Panko did not immediately return a call seeking comment.

Chicago-based Klaff Realty picked up the shuttered Babies “R” Us store, records show. Led by Hersh Klaff, the firm specializes in the acquisition of distressed retail spaces. Klaff has invested in some of the biggest recent retail deals, including the Cerberus-led $3.3 billion takeover of several grocery chains including Jewel-Osco, according to the Chicago Tribune. A representative from Klaff Realty was not immediately available to comment.

In April, Toys “R” Us announced it would shutter its 800 stores nationwide. Shortly after that, the company hired Raider Hill Advisors to sell off its real estate holdings — and stores have been flying off the shelves since.

In December, a former Toys “R” Us store in Niles sold for $5.4 million to the president of Patel Bros., a local chain of Indian grocery stores.

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