Brad Hutensky has returned to the suburban Chicago retail market for two more big pieces of property.
His Connecticut-based firm Hutensky Capital Partners paid $63 million late last month for the 486,000-square-foot Bloomingdale Court in the western suburbs, public records show. It also bought the 364,000-square-foot Lake View Plaza retail asset in south suburban Orland Park. The deals helped Ohio-based Washington Prime Group exit its investments in the properties, which the seller, a spinoff of mall giant Simon Property Group, owned for long terms, including more than 15 years for the Bloomingdale property.
The price of the Orland Park property wasn’t included in public records, but the buyer took on a nearly $68 million loan from New York Life Insurance Company to finance both acquisitions, records show. The loan amount comes to $74 per square foot.
“We’re aggressively pursuing power shopping centers in Chicago,” as opposed to grocery-anchored assets, Hutensky said in an interview. He declined to disclose the total price. “We think that they’re great opportunities given that the retail market is so strong. People are rediscovering retail as an investment class.”
Washington’s sale comes after Macy’s last year agreed to occupy a 35,000-square-foot space in the Bloomingdale asset, at 364 West Army Trail Road, likely boosting its value. Macy’s plans to open one of the smaller format stores the retailer has been leaning into across the nation amid cutbacks through closures of more sprawling locations, including at the nearby Stratford Square Mall in Bloomingdale.
Hutensky is bulking up on its Chicago-area holdings with the deal, even as the market for open-air shopping centers slows down a bit after a scorching hot streak coming out of the pandemic.
Shopping center rent growth moderated to 3.4 percent in the third quarter, with mean asking rents of $24.53 per square foot across the U.S., aligning with 2017-2019 averages as the market rebalances from post-pandemic peaks of nearly 5 percent, according to Cushman & Wakefield. Limited new shopping center supply, with 6.4 million square feet coming to market across the U.S. so far this year followed a record low of 10 million last year, and a low 5.4 vacancy rate challenged tenant access to prime spaces, Cushman found.
Washington Prime didn’t return requests for comment. Bloomingdale Court’s other tenants include Ross Dress for Less, Dick’s Sporting Goods and Joann Fabrics, and there’s 44,000 square feet of space available to lease, according to a CBRE listing. The Orland Park property’s tenants include Best Buy, Petco, Shoe Carnival and Joann, and it has 18,000 square feet available, CBRE shows.
Meanwhile, Hutensky’s and Macy’s interest in the Bloomingdale property reflects the yearslong shift in the retail market away from indoor regional malls and toward open-air shopping centers, as Macy’s closed its Stratford Square Mall location in the western suburb years ago before planning the Bloomingdale Court property. Bloomingdale officials have worked to acquire Stratford Square mall in a bid to position it for redevelopment, an effort that involved lawsuits between the mall’s former partial owner, Namdar Realty Group, and the village. That was later settled when the village took control of the asset.
Hutensky also owns the Wheaton Town Square shopping center in Wheaton, which it bought in partnership with Chicago-based Tucker Development in 2015 for $57 million. And in 2021, Hutensky spent $31 million total to buy shopping centers in Hillside and Oswego; it sold the smaller Oswego property in September, Hutensky said.
CBRE’s Christian Williams, George Good and Michael Wilson brokered the Bloomingdale and Orland Park sales.
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Chicago
Shopping center spree: Hutensky Group buys 2 suburban malls
Commercial
Chicago
Macy’s returning to Bloomingdale, but not Stratford Square Mall