A New York investor took advantage of a sweet discount in its acquisition of a Lincoln Park retail center.
Regal Ventures paid $11.2 million for the 55,000-square-foot Belden Centre at 2301-2315 North Clark Street, better known as the former home of Tower Records, Crain’s reported. That’s about $203 per square foot.
Regal took a $7.9 million loan from W Financial to facilitate the purchase.
Newport Capital Partners, the seller, bought the property for $17.8 million, $322 per square foot, in 2013. The sale price marks a 37 percent drop from when it last changed hands, highlighting the impact of rising interest rates and the acceleration of e-commerce during the pandemic, which has contributed to soaring retail vacancies in Chicago.
Those factors, along with broader challenges facing commercial real estate, caused national retail sales to fall 14 percent year-over-year in the first quarter, the outlet reported, citing data from research firm MSCI Real Assets.
Regal, meanwhile, is betting on the Belden Centre’s prime location in an affluent North Side neighborhood and continued recovery of the retail market.
“Regal Ventures’ analysis concludes that retail assets in well located, highly dense areas will continue to perform through this next cycle,” Regal managing partner Alex Smith told the outlet. “Demand for space from tenants remains strong, while both high interest rates and construction costs continue to suppress introduction of new inventory into the sector.”
The Belden Centre is 69 percent leased by three tenants: Guidepost Montessori, Lincoln Park Preschool & Kindergarten and Salon Lofts. The discounted price gives Regal more overhead to invest in the property and fill up the remaining space.
The acquisition included the 76-space parking garage on site, but excluded the 61 residential units situated atop the retail center. It’s Regal’s first investment in the Chicago area.
For Newport Capital Partners, the sale represents a “strategic disposition” aligned with its broader investment objectives, said principal Ben Andrews. Notably, the transaction enabled Newport Capital to retire the property’s $10.4 million debt, issued by Wintrust Bank in 2022.
—Quinn Donoghue
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