ASB Seeking $160M in Gold Coast Retail Sale

ASB Real Estate Investments is aiming to cash out of its repositioning of a former Barneys store that followed the retailer’s 2020 bankruptcy, which left a massive hole to fill on the Gold Coast.

Robert Bellinger’s Maryland-based firm, which bought 15 East Oak Street more than a decade ago, is preparing to shop the six-story, 97,000-square-foot building for sale, according to people familiar with the planned offering. The seller is set to hire a CBRE team to lead the marketing efforts, and is said to be seeking more than $160 million, almost $1,650 per square foot.

An ASB executive confirmed the firm is considering a sale. There’s no debt against the property after ASB paid off a $68 million mortgage several years ago amid the repositioning.

ASB bought out its partner, New York-based Thor Equities, from its interest in the property before the Barneys downfall, the seller said. The pricing of that transaction was not made public. Thor declined to comment.

While the asking price, if fetched, would mark one of Chicago’s biggest retail sales ever, other market sources believe the building is worth closer to $120 million, which would amount to a big loss in value, since the Thor-ASB venture bought it for $155 million in 2013.

Either way, the seller is aiming to limit the damage done by Barneys’ bankruptcy that required a changeup for the property’s business plan.

Yet the property, at the intersection of Oak and Rush streets, is one of Chicago’s most recognizable locations and the offering will be played up as a generational opportunity to own an exclusive corner.

After Barneys shut down, ASB began an extensive renovation that sliced the building into multiple spaces that could be leased, rather than trying to land a single tenant to fill the 90,000 square feet Barneys previously held. While ASB declined to say how much it spent on renovations, city building permit data shows a reported cost of more than $27 million across more than two dozen projects since 2020. It’s unclear how much of the work was paid for by ASB versus the building’s new tenants as they built out their spaces while preparing to occupy the property.

The most desirable spots in the building — the ground-floor and second-story spaces fronting Oak and Rush streets — are now respectively leased to Cartier and Balenciaga, which opened its first Chicago store in the building recently. Cartier’s lease is for 8,000 square feet of the first and second floors, while Balenciaga has a two-level, 6,700-square-foot shop.

The landlord is still hunting for tenants to fill space on the second and fifth floors, marketing materials show; ASB also has prospects for refilling the top-floor space, which was formerly a restaurant called Fred’s.

Oak and Rush remains one of the strongest corners in Chicago retail, as Barneys helped to drive demand to the area by famously shunning the Magnificent Mile with its selection of a property across the street from 15 East Oak in 1992 (Barneys moved and expanded its footprint to ASB’s property in 2009, when it was owned by a different landlord). Rents reach more than $350 per square foot on Oak and up to $400 in some spots on Rush, according to people familiar with the market. The retail tenants at 15 East Oak are said to be paying between $250 and $300 per square foot on average, with pricing for the first-floor space significantly higher than upper levels of the building.

But the remaining vacant space on the third and fourth floors of the 15 East Oak property is also being marketed for potential office users, as well. While office rents in a Gold Coast luxury building featuring high-end retailers tend to run higher than even Fulton Market office rents, they’re still nowhere close to what retailers pay for prime Chicago property. Asking office rents run above $40 per square foot in the Gold Coast, before taxes and other expenses that tenants usually pay, according to a person familiar with the property.

High-end retail properties have drawn top dollar in other markets, including from tenants who have decided to buy their own real estate. Jeff Sutton sold New York properties on Fifth Avenue to Gucci and Prada — which both previously leased their spaces — for a combined $1.8 billion at the end of 2023 and early this year.

The last high-dollar retail sale on Oak Street, which has become perhaps Chicago’s hottest destination for shopping, was the $16.4 million sale of 107 East Oak to the family behind Razny Jewelers, which plans an expansion into the space.

The CBRE team leading the sale effort for 15 East Oak includes Doug Middleton, Tim Gifford, Luke Molloy, Blake Johnson and David Knapp.

Editor’s note: This story was updated to correct the spelling of Molloy’s surname.