Acadia Takes Majority Stake in Chicago High-Street Retail Property
Acadia Realty Trust has added a high-street gem to its core portfolio with the acquisition of an 88.4 percent stake in 840 N. Michigan Ave. in Chicago.
By Barbra Murray, Contributing Editor
Acadia Realty Trust has added a high-street gem to its core portfolio with the acquisition of an 88.4 percent stake in 840 N. Michigan Ave. in Chicago. The REIT acquired the majority interest in the 87,000-square-foot -property, located along the Miracle Mile of the city’s tony Gold Coast area, for $144.3 million.
Acadia financed the purchase with cash, operating partnership units and the assumption of $48.6 million of pro-rata debt, and is now partners with four of 840 N. Michigan’s original developers: CBRE|U.S. Equities Realty’s Nancy Pacher, Camille Julmy, and Bob Wislow and Doris Holleb.
Occupying a prime corner parcel that was once the site of the Bonwit Teller Building, the freestanding four-story retail structure at 840 N. Michigan was constructed at a cost of $35 million in 1992 and pre-leased as flagship space for Escada, FAO Schwarz, and Waterstones Booksellers. Today, the fully occupied property is home to European fashion retailer H&M, which recently expanded and renewed its lease, and Verizon, which just opened its new two-level 10,000-square-foot Destination Store in November.
“Following the successful completion of this most recent re-tenanting, we felt that the time was right to recapitalize,” Camille Julmy, vice chairman of CBRE Inc., noted in a prepared statement. “Given its complementary, high-street portfolio and extensive footprint in Chicago’s Gold Coast and Lincoln Park neighborhoods, Acadia was a natural choice as our majority partner.”
CBRE|U.S. Equities Realty, the merged Chicago operations of CBRE Group and U.S. Equities Realty, will manage the property along with Acadia.
Acadia focuses its core portfolio activity on high-barrier-to-entry, irreplaceable retail assets, and the REIT has been quite acquisitive this year. Including the stake in 840 N. Michigan, its core purchases for 2014 now total nearly half-a-billion dollars. Other notable acquisitions include the 3,200-square-foot street retail co-op unit at 131-135 Prince St. Manhattan, picked up for $51.4 million.
