Starwood takes steep loss on Bolingbrook shopping center
Struggling suburban Chicago shopping center sold for $30M, half its debt
A Chicago real estate investment firm acquired a struggling mall in the Chicago suburb of Bolingbrook, handing Starwood Capital Group a steep loss on the property.
A joint venture of M&J Wilkow and Bixby Bridge Capital bought the debt tied to the Promenade Bolingbrook shopping center at 631 East Boughton Road and subsequently took ownership of the property, Crain’s reported.
While the sale price hasn’t been disclosed, a person familiar with the deal said the venture paid $30 million for the $60 million loan on the mall. The buyers were then able to claim ownership of the property through a deed-in-lieu of foreclosure from Miami-based Starwood, which had paid $81.5 million for the property in 2014.
The sale of the Promenade adds to Starwood’s financial losses; the firm already lost a mall in Joliet to its lender last year and is facing foreclosure on another one it owns in South Barrington. Another shopping center it owns in Chicago Ridge is also on the verge of distress.
In addition to Starwood, Union Bank is also taking a financial hit with the sale. The bank is also poised to similarly lose money on the Arboretum of South Barrington shopping center. Union Bank reportedly sold a $66.3 million loan tied to the property for about half of the mortgage value.
The 779,000-square-foot Promenade shopping center is 89 percent leased with Macy’s, Bass Pro Shops and Ulta serving as anchor tenants.
Houston-based dine-in movie theater chain Star Cinema Grill has also signed a lease for the recently available theater in the shopping center. The iPic movie theater that previously occupied the space announced its closure late last year.
“We were attracted to The Promenade Bolingbrook because of its strong anchor tenants and its location in this growing southwest suburban retail node,” John Wiechart, senior vice president of acquisitions for M&J Wilkow, said in a statement.
Bixby Bridge Capital also recently sold the former OfficeMax headquarters in Naperville for $73.3 million. It redeveloped the site into a multi-tenant office building now called the Shuman.
[CCB] — Victoria Pruitt