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It appears as though the hot retail sales on Michigan Avenue this holiday season won't be limited to shoppers. Meyer Bergman made waves with the purchase of three buildings on Boul Mich for a whopping $295M, the fifth-highest price ever paid for a Chicago area retail property. The connected buildings at 663 N Michigan, 669 N Michigan and 673 N Michigan total over 148k SF.
The seller, the Wisconsin Investment Board, put the property on the market in March and it was believed at the time it could fetch as much as $300M. The buildings are home to a Cole Haan store and Nike Chicago. What makes this deal intriguing, aside from the price, are the options Bergman has to maximize his investment. Zoning is in place to add another 229k SF through redevelopment. The lease for Garmin at 663 N Michigan expires next November, but the GPS retailer may move out sooner, giving Bergman an opportunity to land another marquee retailer and capitalize on rising retail rents.
The sale price breaks down to $1,990/SF. The deal, Bergman's first in Chicago, is believed to be the first major retail property in the market to sell with a cap rate below 4%. It's beginning to look a lot like Christmas, indeed. [Crain's]
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