A New York real estate investment company sold its Oak Street property in Chicago for $120 million, the highest-priced sale of a Chicago retail property since 2016.
Jenel Management sold the 32,000-square-foot development at 57-65 East Oak Street to a German investment fund managed by Union Investment Real Estate, according to Crain’s Chicago Business. The deal pencils out to $4,165 per square foot, the third most ever paid for a retail property in the city.
Crain’s reported the building sold for $120 million, citing a person familiar with the deal. CBRE, which represented both sides of the deal, didn’t disclose the sale price, but said it was the highest for a Chicago retail property since 2016.
Union Investment is betting that East Oak Street, home to high-end retailers including Prada and Dior, will thrive again as it recovers from the pandemic.
“East Oak Street is the number one destination for luxury goods and fashion,” said Kseniya Merritt, head of North America’s retail investments in Union Investment. “Due to the demand for space, vacancies are historically low and rents are stable.”
Jenel also gained from the sale. The company paid about $70 million for the two buildings it demolished and constructed for the current three-story building that Chanel and Van Cleef & Arpels are leasing. The total cost for the project came to around $106 million as of December 2019, according to a report from DBRS Morningstar that month.
Tenants struggled to keep up with rent owed to the New York landlord during the pandemic. The property’s largest tenant, Le Colonial, failed to pay rent in April and May this year. Le Colonial, Chanel and Van Cleef negotiated rent deferrals with Jenel last year as the pandemic battered the retail sector. All three companies were paying rent as of August this year, according to DBRS Morningstar.
Keely Polczynski, senior vice president in the Chicago office of CBRE, represented both the buyer and seller in the deal.
[Crain’s] — Connie Kim