CHICAGO — Acadia Realty Trust (NYSE:AKR) has acquired an 88.4 percent interest in an 87,000-square-foot retail building along Chicago’s Magnificent Mile for $144.3 million. The four-story flagship property is located at 840 N. Michigan Ave.
The space is fully occupied by H&M and Verizon. H&M has operated at the space since 2003. The apparel and accessories retailer recently signed a new 10-year term that expands its selling space by about 10,000 square feet at the below-grade concourse level. H&M’s flagship now totals 59,500 square feet.
Verizon also rolled out its newest Destination Store at this location. The two-story, 10,000-square-foot space is Verizon’s largest store in the country and one of only two such experience stores, according to Acadia.
“Flagship locations, such as 840 North Michigan Avenue, located in live-work-play-visit cities, enable our retailers to pair highly visible branding with access to thousands of shoppers daily,” says Joel Braun, Acadia’s CIO and executive vice president. “In our experience, retailers have been highly motivated to invest their own dollars to uniquely merchandise these flagship stores.”
The building is located directly across the street from Water Tower Place. It is situated along the stretch of Michigan Avenue known as Magnificent Mile, a premier shopping destination that spans from the Chicago River to Oak Street within the city’s Gold Coast District.
Acadia is partnering on this transaction with four of the property’s original developers and existing owners, including Nancy Pacher, Camille Julmy and Bob Wislow of CBRE|U.S. Equities Realty, along with Doris Holleb.
“We share their enthusiasm for the Magnificent Mile and are committed to together maintaining this property’s top-tier status, as they certainly have during their 35 years of ownership,” Braun continues.
U.S. Equities Realty purchased the building in 1979 with partners Marshall Holleb and Robert Gerstein. At that time, it served as Crate & Barrel’s flagship store. The space was torn down in 1990 and rebuilt as flagship space for Escada, FAO Schwarz and Waterstones Booksellers.
“More recently, we worked with H&M to increase their selling space at this productive store and also brought in Verizon, whose engaging Destination Store concept also suits this landmark location,” Julmy says. “Following the successful completion of this most recent re-tenanting, we felt that the time was right to recapitalize. 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. We look forward to a long relationship with them.”
Acadia and CBRE|U.S. Equities Realty will jointly manage the property. The sellers were represented by CBRE|U.S. Equities Realty, along with Doris Holleb and Robert Gerstein.
Acadia Realty Trust is an equity REIT that targets long-term, profitable growth via its dual (core and fund) operating platforms and its location-driven investment strategy. It is based in White Plains, NY. Acadia’s stock price closed on Thursday, Dec. 4, at $31.79 per share, up from $24.82 per share a year ago.
— Nellie Day