Oxford and Angelo Gordon Selling Michigan Avenue Retail

Investors Oxford Capital Group and Angelo Gordon are selling 30,000 square feet of Chicago retail space on a downtown corner performing well while much of the rest of the market is in a transition phase amid the pandemic recovery.

A joint venture of the investment firms has hired CBRE to shop the property at the base of the 452-room LondonHouse hotel at 360 North Michigan Avenue, a landmark building originally built in 1923 that was redeveloped into lodging by Oxford and opened in 2016, according to a marketing flier.

The retail space spans the building’s first two floors and is 95 percent leased with seafood restaurant Ocean Prime, fast-casual chain Smashburger and coffee shop La Borra del Cafe among its tenants that signed leases during the pandemic, according to the marketing materials. CBRE’s Keely Polczynski, John Saletta and Anthony Beinar have the listing.

Beinar declined to comment on what the property might sell for, and Chicago’s uneven retail recovery makes it difficult to value. Some of Chicago’s priciest retail properties sold last year include the 195,000-square-foot Neiman Marcus building at the struggling northern end of the Magnificent Mile at 737 North Michigan for $94 million, or $481 per square foot. Further south and slightly west, a River North asset, home to the TAO Chicago restaurant and nightclub, was sold by Sterling Bay to Fundamental Income for $29 million, or $863 per square foot, in August.

If the sellers make a deal, it won’t be the first time in recent memory that New York-based Angelo Gordon cashed out of Chicago retail properties. In late 2021, it sold two North Side assets for $46.25 million.

Oxford Capital Group is one of Chicago’s largest hotel owners and operators, with a portfolio that includes 2,160 rooms in the city, including the Godfrey Hotel, Hotel Julian and Le Meridien Essex Chicago. In 2021, a partnership of Oxford Capital Group and Gettys Group defaulted on a combined $70 million in loans on the Hotel Felix in River North and Holiday Inn Express Chicago Magnificent Mile. Hotel Felix was recently bought at auction by Monarch Alternative for $29 million.

Oxford and Angelo sold the LondonHouse’s hotel portion of the 360 North Michigan Avenue property for $315 million to Germany’s Union Investment Real Estate in 2016 and kept the retail portion. There’s two spaces with room to bring in additional revenue to the property, with a 1,400-square-foot spot between La Borra and Smashburger ready to rent as well as a 4,100-square-foot spot outfitted with a new kitchen, the CBRE listing said.

The LondonHouse listing, which is just south of the Chicago River from where the Magnificent Mile retail strip begins, is at least the second time in recent months that CBRE has been hired to test the waters on the famed Michigan Avenue retail scene. The brokerage was also tapped to market 22,000 square feet of retail space leased to Vans, Chick-Fil-A and Bank of America at 500 North Michigan in November.

While the storied corridor bid farewell to several high-profile stores duringthe pandemic, including Banana Republic, the Mag Mile’s southern end, across the river from the LondonHouse, is healthier. When Oxford sold the hotel in 2016, it held onto the retail space because the firm felt the gravity of the city’s shopping scene was shifting southward across the river due to the popularity of Millenium Park.