Will This Mag Mile Retail Spot Fetch A Buyer This Time?

Chicago’s Magnificent Mile is about to get tested as a retail property anchored by luxury fashion house Louis Vuitton hits the market for the second time after its landlord tried and failed to sell the asset last year.

JLL brokers Keely Polczynski, Michael Nieder, John Dettlaff and Caity Tirakian have been hired to sell a nearly 52,000-square-foot space in the 37-story Palmolive Building at 919 North Michigan Avenue, CoStar reported.

Nuveen Real Estate, owner of the Palmolive since 2012, first tried to sell the retail space on the lower levels of the building in April 2022, before pulling the listing off the market. Nuveen is trying again, but Chicago’s retail sector hasn’t improved a whole lot since the last time it was for sale.

The Mag Mile, once known as Chicago’s preeminent shopping destination, is in much less demand compared to pre-pandemic days. With the public health crisis triggering an increase of online shopping, many retailers, such as Gap, Banana Republic and Macy’s, have been forced to vacate the famed strip, leaving behind an array of empty storefronts. Hiked interest rates, crime and overall pessimism surrounding commercial real estate in Chicago have further deteriorated the market’s health this year.

It’s unclear what Nuveen is expecting to make in a sale, but offers were expected to hover around $150 million when the Palmolive hit the market last year. If the building sold for roughly that amount, it would be a huge win for Nuveen, as the firm paid almost $90 million for the site 11 years ago.

The space is 69 percent leased, the outlet reported. Along with Louis Vuitton, tenants include luxury retailers David Yurman and Breitling and residential design studio Tom Stringer Design Partners. The office space and condos on the above floors are separately owned.

While there haven’t been many Mag Mile properties to change hands in recent years, there have been some sales to compare to. A venture of Farpoint Development and Saxony Capital recently closed in on a deal to pay around $40 million for the vacant 17,400-square-foot building at 830 North Michigan. That’s about $2,300 per square foot.

In March, Blatteis & Schnur bought a fully leased, 5,860-square-foot space at 909 North Michigan for $27.3 million, or roughly $4,600 per square foot. The Mag Mile looked poised for a comeback in May 2022, when Silvestri Investments paid $94 million for the four-story building at 737 North Michigan, but big deals like that have been few and far between.

— Quinn Donoghue