A Gold Coast Property that’s changed hands several times over the past 15 years now belongs to one of its previous landlords.
An affiliate of Stone Street Partners bought the 5,400-square-foot building at 1003 North Rush Street from Atlanta-based Invesco for $12 million, which marks a loss from the seller’s 2014 purchase price, Crain’s reported.
It’s fully leased by apparel retailer Vuori, which opened its store last year. The deal was brokered by Mid-America Real Estate, and equates to roughly $2,222 per square foot. Invesco bought it for $14.1 million in 2014, when it was occupied by Starbucks.
While other Chicago retail markets have struggled to rebound from the pandemic, like the famed Magnificent Mile on Michigan Avenue, the Gold Coast’s recovery is mostly complete. Oak Street and other popular strips in the neighborhood have relatively low vacancies, which Stone Street’s Brian Farley said was a motivating factor behind his firm’s investment.
“Everything on Oak Street is pretty much leased,” Farley told the outlet. “Oak Street rents have to go up from this point forward.”
Stone Street owned the 1003 North Rush property before selling it to Mark Hunt for $9 million in 2008. Hunt then sold the property to investor Don Wilson for $12.4 million in 2012, and it changed hands once more in 2014 when Invesco bought it.
Although the recent sale price is lower than nine years ago, it’s not necessarily an indicator that the property is troubled. Rising interest rates, fears of a recession and stricter loans have pushed down property values across the country.
Plus, it’s possible that the previous tenant, Starbucks, paid more than Vuori in rent, meaning the building’s income and value would subsequently decline when the apparel retailer moved in. The property generates roughly $702,000 in annual net income, while Vuori’s rent is at 25 percent to 30 percent below recent market rents in the area, according to a Mid-America brochure.
Vuori currently has a 10-year lease at the site with a 2.5 percent rent increase set to occur annually.
— Quinn Donoghue
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