East Coast investors try again to sell Streeterville retail asset

A joint venture of East Coast investors is trying to sell one of downtown Chicago’s larger retail assets again after seeking an exit before the pandemic and failing to find a buyer.

New York-based Madison Capital and Wheelock Street Capital hired Cushman & Wakefield to sell the 251,000 square foot Retail at River East shopping center at 322 East Illinois Street in Streeterville, Crain’s reported.

The three-story complex, built in 2001, could go down as one of the biggest properties to change hands in the last seven years. Whether any buyers bite on the new listing will be a strong indicator of investor demand amid the factors of rising interest rates and post-pandemic uncertainty diminish property values.

Madison and Wheelock attempted to sell the property for $120 million in 2019, but never made a deal. Yet, it’s tough to estimate how much the space will sell for today given that large retail listings seldom occur in the area.

Retail properties of this size rarely sell in Chicago, with the last deal for such an asset occurring in 2016, when Madison and Wheelock bought River East for $94 million, the outlet reported.

The shopping center serves as the base for two larger buildings: an 18-story Embassy Suites hotel and a 58-story condominium tower. Notable tenants include Lucky Strike, AMC Theatres and UChicago Medicine, which has expanded in the property recently and added an MRI machine, said Cushman’s Michael Marks. Despite “shaky” parts of downtown real estate and the pandemic’s effect on movie theaters and other entertainment avenues, Marks is still bullish on River East after AMC extended its lease and planned a costly overhaul of its space.

“You have this entertainment side, and you have this medical side,” Marks told the outlet. “It’s a really good diversification of not only the revenue stream but also the demand generators — what is bringing folks to this property.”

The property’s fully leased occupancy is another alluring aspect for potential buyers, as restaurant tenant The Monarch and Lion recently replaced Bellwether as a new tenant.

Madison also owns the retail portion of 875 North Michigan Avenue, formerly called the John Hancock Center.

-Quinn Donoghue