Baker Development Lists Chicago-Area Retail Amid Arizona Pivot

Two decades after transforming a polluted paint factory site into a retail hub, Baker Development is ready to cash out.

The Chicago firm listed its Elston Retail Collection for just under $72.5 million, Costar reported. The asking price breaks down to about $383 per square foot.

The four buildings, at 2100-2196 North Elston Avenue comprise 189,000 square feet, and are fully leased to Best Buy, Kohl’s, BMO Bank and Chicago Speech Therapy, with an average of more than five years left on their terms.

A buyer could assume $58 million in debt on the property, carrying a below-market rate of 3.65 percent. Annual net operating income is pegged at $4.6 million, implying a 7 percent cap rate. Leases stretch into the early 2030s, each with rent bumps and renewal options. Chicago Speech Therapy recently signed a 10-year lease for an 8,500-square-foot space formerly home to Bubbles Academy, filling the last vacancy.

Marketing materials pitch the complex as a rare triple-net-leased buy on the edge of Bucktown and Lincoln Park, near the Kennedy Expressway and the long-stalled Lincoln Yards site. Boulder Group broker Jimmy Goodman, who’s handling the listing, called it “generational real estate in Chicago.”

The sale would mark the end of a long hold for Baker, which began assembling 11 acres of industrial and residential parcels along Elston in the early 2000s. The developer, led by CEO Warren Baker, remediated the land, won a zoning change, and built the retail boxes and parking garage. The rezoning was part of an early push to chip away at the riverfront’s industrial corridor designation, a process that later unlocked 760 acres for mixed-use development. That wave has already brought the Triangle Square apartments across the street, and JDL and Kayne Anderson’s proposed 3,300-unit Foundry Park just north at Lincoln Yards.

Baker is pivoting toward industrial projects in Arizona, where the company has another office. Earlier this year, it sold the Elevate Lincoln Park apartments for nearly $114 million to Tishman Speyer, also with an assumable low-interest loan.

Goodman said the timing could be right for a retail deal of this size.

“There are bigger deals transacting and more institutional capital being deployed,” he said.

— Eric Weilbacher