A Chicago investor has taken control of a struggling shopping center in the residential suburb of South Barrington.
A venture led by Rick Heidner bought the defaulted $67 million loan on the Arboretum of South Barrington, Crain’s reported. The transfer of the 480,000-square-foot retail property marks the end of a 2020 foreclosure suit filed against the property’s former owner, a venture of Starwood Capital.
Heidner’s venture seized the property by buying the debt from UnionBank, the lender that filed the suit, in February. It got the title to the shopping center from Miami-based Starwood in an “amicable transaction.”
“The Arboretum will be our flagship property,” Heidner said in a statement about the deal. He also said the venture is currently making plans to further develop the property.
Heidner owns two Hoffman Estates companies — Heidner Properties and video-gambling company Gold Rush Gaming. He hasn’t disclosed what he paid for the debt on the Arboretum, which UnionBank put up for sale this past October.
The shopping center ran into trouble during the pandemic, when multiple tenants, including Sur La Table, Loft and Gymboree, filed for bankruptcy protection.
Despite the recent recovery of the retail market, Starwood has lost control of multiple retail properties. In April, a venture of M&J Wilkow and Bixby Bridge Capital bought debt tied to the Promenade Bolingbrook shopping center and subsequently took ownership of the property.
In October 2020, Starwood also lost the 1 million-square-foot Louis Joliet Mall in Joliet to its lender after defaulting on a loan payment months earlier.
Arboretum tenants include Arhaus, Sephora, L.L. Bean and Xsport Fitness. Star Cinema Grill has also taken over the 38,000-square-foot theater space that was previously occupied by iPic.
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