May
04

Banana Republic, Lululemon, Container Store Coming to South Loop

May 04, 2014
 - Container Store Group Inc. is the biggest of three new tenants at Roosevelt Collection in the South Loop.

Container Store Group Inc. is the biggest of three new tenants at Roosevelt Collection in the South Loop.

A trio of national retailers — Banana Republic, Lululemon and Container Store — are moving into the Roosevelt Collection shopping center in the South Loop, a big casualty of the real estate crash that is steadily filling up.

Totaling 37,000 square feet, the new leases will bring the 330,000-square-foot retail development’s occupancy to 79 percent, up from just 23 percent when Chicago-based McCaffery Interests Inc. and a partner bought it three years ago. It was one of the biggest distressed real estate deals after the crash, and the recent leasing progress suggests McCaffery’s bet could pay off handsomely.

Container Store Group Inc. is the Roosevelt Collection’s biggest new tenant, with a lease for more than 26,000 square feet, according to a recent McCaffery leasing document. Apparel retailer Lululemon Athletica Inc. leased more than 2,900 square feet there, the document shows.

A McCaffery spokeswoman also confirmed that Banana Republic, a unit of San Francisco-based Gap Inc., leased 7,500 square feet in the shopping center at 150 W. Roosevelt Road, west of Clark Street. She declined to confirm the names of the other new tenants or discuss their leases.

“We’re trying to really put a good mix of nationals and locals together that fit with the South Loop community,” she said.

The leasing activity should attract other national tenants that may not immediately think of the South Loop as a retail destination, said John Vance, a vice president at Chicago-based Stone Real Estate Corp. who wasn’t involved in the deals.

‘GETTING WHAT THEY NEED’

“When you go to other national retailers and they ask what’s the co-tenancy, they can say, ‘Here it is – it’s known names,’” he said. “I think they’re getting what they need. It’s just taken them longer to get to it.”

McCaffery and its partner, Los Angeles-based Canyon Capital Realty Advisors LLC, paid about $160 million for the Roosevelt Collection in 2011, when the only retail tenant at the property was the ShowPlace ICON movie theater.

The price was a fraction of the $350 million cost of the project, which was developed by the predecessor firm of Chicago-based Centrum Partners LLC and was caught by the vortex of the real estate crash when Centrum completed it in 2010.

After announcing a first wave of retail deals for Roosevelt Collection in November 2012, McCaffery has fought to reel in a range of other tenants, inking leases with a doctor’s group,women’s fashion chains Loft and Bevello and several other firms.

APARTMENT TOWER PLANS

Meanwhile, the McCaffery leasing document shows the company wants to build a 355-unit apartment tower on the northwest corner of the property. Further details about the new residential building were unavailable. The property currently includes 342 apartments.

For Banana Republic, “the new Roosevelt Collection property is the right place in Chicago to best serve our customers. We look forward to the opening,” a Gap spokeswoman said in an email.

Representatives at Vancouver, B.C.-based Lululemon and Coppell, Texas-based Container Store didn’t return messages.

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