Sellers Score $55 Million Payday for Suburban Chicago Retail

Edward Hassan and Adam Firsel cashed out while they were up big this summer from a bet on distressed suburban Chicago retail they made back in 2019.

A joint venture of Firsel’s Deerfield-based firm Core Acquisitions and Hassan’s Orland Park-based Edwards Realty fetched $55 million for its nearly 200,000-square-foot Burr Ridge Village Center shopping destination in the western suburbs. They sold the property for $275 per square foot to Chicago-based investor David L. Husman’s company Heartland Real Estate Partners, according to public records.

The deal completed a lucrative turnaround for Core and Edwards, who paid just $15 million six years ago to buy the property out of distress from an offshoot of its original developer. Soon after buying, Core and Edwards dealt with losing a couple of tenants due to their respective companies’ bankruptcies, Firsel said.

The property was built by Minnesota-based Opus Group back in 2007 at a cost of $85 million, according to previous reports, but Core and Edwards took it over from an affiliate of the developer known as Founders Properties at a fraction of that cost. Founders had refinanced Burr Ridge Village Center for a little more than $18.5 million in 2014, but brick-and-mortar retail was struggling at the time.

However, the sector has bounced back, as evidenced by Core’s ensuing renovations and a leasing campaign that cost another $7 million to refill the property to over 95 percent, from just 60 percent at the time of its acquisition. Its improvements included creating an “entertainment district” by closing off a road and replacing it with a brick-laden pedestrian-only zone between tenant stores Hampton Social and Topaz Cafe, Firsel said.

“We also brought in a lot of medical tenants,” he said, noting that Core rented to dermatology, veterinary, physical therapy and healthcare tenants.

Husman didn’t comment on the transaction. But his firm has invested previously with Core Acquisitions and is keeping Core as Burr Ridge Village Center’s property manager. Retail broker Mid-America Real Estate led the lease-up effort for Core and is still advertising the property.

While the Burr Ridge deal was completed quietly this summer in an off-market transaction without real estate brokers, it set the stage for another big gain recently posted for a suburban Chicago retail property revived from financial disaster.

To the north, the 600,000-square-foot Algonquin Commons shopping center traded this month to Chicago-based asset manager Nuveen for $100 million, four years after its previous owners Red Mountain Group and F&F Capital bought it for just $30 million and then spent another $33 million on its comeback. In 2006, it had been valued at $154 million in a purchase by Inland Real Estate that resulted in a big loan default.