Two New York firms are taking a chance on Chicago’s Magnificent Mile, a once-vibrant retail strip that’s still reeling from the pandemic.
Namdar Realty Group and Mason Asset Management have purchased the mostly-vacant, 22,900-square-foot retail space at the base of the Warwick Allerton Hotel Chicago, CoStar reported. Terms of the deal were not disclosed.
JLL brokers Keely Polczynski, Michael Nieder, John Dettlaff and Caity Tirakian represented the seller, London-based Grosvenor, which bought the space at 701 North Michigan Avenue for $17.25 million in 2002.
Luxury watch retailer Rolex is the lone tenant, occupying 2,240 square feet on the ground floor and another 2,040 square feet of storage space in the basement.
The acquisition underscores a notable shift in investor sentiment toward prime retail assets, despite the prevailing challenges facing the sector. The Mag Mile, in particular, has been plagued by an increase of online shopping and a reduction of foot traffic in the downtown area since the pandemic, leading to the loss of retailers such as Banana Republic, Uniqlo, Gap, Macy’s and Timberland.
The 701 North Michigan property, however, garnered significant interest, reflecting confidence in the potential revival of high-profile retail destinations.
“This was a heavily sought-after offering, given the opportunistic nature of the deal at a key corner along an internationally renowned high street,” Polczynski told the outlet.
Namdar and Mason have expertise in revitalizing distressed retail properties and a track record of successful collaborations. Elliot Nassim of Mason Asset Management is enthusiastic about expanding the firm’s footprint in Chicago’s upscale retail scene and supporting Rolex’s continued success while enhancing the retail mix.
Despite a 39 percent decline in urban retail sales nationwide in 2023, prime retail corridors have demonstrated resilience, with asking rents rising 3.3 percent last year, the outlet reported. JLL forecasts a rebound in retail sales over the next 18 months due to strong consumer spending.
—Quinn Donoghue
