Structured Development: The King Of Clybourn Corridor Retail
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Structured Development’s $130M sale of Blackhawk on Halsted to LaSalle Investment Management would have been unthinkable to anyone who remembers what the area looked like a decade ago—teeming with crumbling factories and warehouses.
But then Structured is largely responsible for the evolution of the Clybourn Corridor over the past 30 years. Structured co-founders Mike Drew (shown) and Dan Lukas say their success in the Halsted Triangle is mostly a series of happy accidents. And Structured isn’t finished. Mike and Dan say they have plans for 200k SF of retail and possibly some apartments on Kingsbury.
Mike says Structured’s first project in the area was in 1986, when it adapted the old Repogle Globe warehouse at 1415 N Dayton (pictured) into loft offices. The firm stuck with office conversions in the area through the ‘90s; as the area slowly shifted from industrial to office, Structured continued to fill demand for office space. The firm converted 1333 N Kingsbury into loft offices, and for years, the building’s main tenant was bike parts manufacturer SRAM. Structured then turned the old Riverworks building into Sara Lee’s HQ in 1996.
Around that time, the foundation for Clybourn Corridor’s transformation into one of Chicago’s hottest retail districts was laid when the old Procter & Gamble factory on North Avenue became a Home Depot that is now one of the nation’s top-performing stores in the chain, thanks to its size and access to the Kennedy Expressway. Mike says Home Depot’s garden center does more business than some whole stores in the company. With Home Depot in place, Dan says he and Mike realized retail demand was growing in the market, and Structured started acquiring parcels.
Those sites are south and east of North and Clybourn, since major retailers like Crate and Barrel and The Container Store were filling up space along North Avenue. Structured’s first retail development in the triangle was Lincoln Park Centre at North Avenue and Halsted Street (pictured), where Eddie Bauer is these days.
As more industrial companies left Clybourn Corridor, Structured saw an opportunity to add residential and more new office development to the growing retail mix. Blackhawk on Halsted started when the old True Value/TruServ paint plant at 1460 N Halsted became available. Mike says it took Structured a couple of years to acquire the property, as True Value underwent a management restructuring. But Structured was eventually able to buy the asset and immediately had an anchor tenant in place in The British School of Chicago, which was looking to expand in Lincoln Park. Since time was a factor—the school needed to be open in time for the 2008 school year—Structured built Blackhawk on Halsted with The British School in mind, while landing REI as another tenant.
The rest of the office space was built on spec. That’s when Structured hit paydirt with healthcare companies. Mike says he envisioned a fitness center at Blackhawk when Howard Rice of Town & Country Pediatrics approached Structured for office space and a promise to deliver more healthcare businesses. Suddenly, Blackhawk became a destination for groups like Advocate, Northwestern University Medicine and other firms that wanted to stay in Lincoln Park with the closing of Children’s Memorial Hospital. Dan says the demand from healthcare firms allowed Blackhawk to quickly reach full occupancy.
Mike says he and Dan weren’t surprised by LaSalle’s jaw-dropping offer for Blackhawk, as there’s less available Class-A product in the market for investors seeking institutional grade investments. Dan adds that Blackhawk is an ideal asset that had global interest from investors before LaSalle acquired it. It’s a complicated mixed-use asset, but the mix of tenants, all locked into long-term leases, made it an attractive play. It didn’t hurt that Structured delivered New City, right across the street from Blackhawk (pictured). Mike and Dan believe the convergence of retail and apartments there will complement existing retail along North and Clybourn, as well as expand a growing residential market anchored by projects such as SoNo.