Gold Coast Three Arts Club building sells to Brookfield Asset Management-backed fund

Restoration Hardware has a long-term lease in the 70k-sf building

DRW founder and CEO Don Wilson with the historic property (Restoration Hardware, DRW)
DRW founder and CEO Don Wilson with the historic property (Restoration Hardware, DRW)

The century-old Three Arts Club building in Chicago’s Gold Coast was bought for $44.7 million by a fund backed by Brookfield Asset Management.

The seller of the 70,000-square foot landmark at 1300 North Dearborn Parkway, which is listed on the National Register of Historic places, was Chicago trader Don Wilson’s Convexity Properties, which bought the building in 2011 after it became vacant in 2004.

Convexity renovated the property with ground floor windows, added a rooftop deck and repaired the Byzantine-inspired exterior. Four years later, Restoration Hardware moved in. The store occupies all six levels for a showroom and the central courtyard for a restaurant and its lease is until 2035.

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The building, built in 1914 by architect John A Holabird, has ornamentation drawn from Europe. Serving as a residence for women artists for 90 years, the building had sculptured panels inspired from the Fontaine des Innocents in Paris and a hint of Mediterranean exterior.

Fundamental Income, the Phoenix, Arizona-based real estate platform backed by the Brookfield fund, wanted to take advantage of a historic asset occupied by a company changing the retail customer experience, said CEO Alexi Panagiotakopoulos. Cushman and Wakefield’s Michael Marks represented the buyer.

Convexity Properties hired JLL to sell the building last year, but changed plans and refinanced the property with a $24 million loan. The property received “robust interest” from potential buyers but it decided to take advantage of low interest rates, David Nelson, head of global investments of DRW, Convexity’s parent company, told Crian’s about its decision last year.

Convexity owns more than 30 commercial and residential buildings across the country. The company is three months away from completing the 50-story BMO Tower at 320 South Canal Street with Riverside Investment & Development.