Max Mara Family Buys Chicago Luxury Retail from Latsko

Another wealthy Italian family splashed into Chicago’s luxury retail scene in an offering that drew bids from global billionaires.

The buyer of 41 East Oak Street in the ritzy Gold Coast neighborhood on the Near North Side is linked to the Maramotti family that owns Max Mara, according to people familiar with the transaction. The upscale clothing company is sold in stores across the world.

The 5,000-square-foot building is leased to high-end retailer Bottega Veneta. It sold for more than $17 million, or upward of $3,400 per square foot, people with knowledge of the deal said. Bottega has yet to open the store but, like other luxury brands of late, agreed last year to move into the Oak Street property and exit its Magnificent Mile location at 800 North Michigan Avenue.

The purchase by the Max Mara leadership — its CEO is Luigi Maramotti — further solidifies Oak as Chicago’s dominant retail corridor. High-end tenants have flocked to the street in recent years while the Mag Mile has struggled with vacancy. The seller was Gold Coast retail property magnate Fred Latsko.

It’s also the latest instance of Chicago’s buzziest retail properties drawing foreign buyers. The bidders who lost out to the Maramotti clan included the family office of Isak Andic, the late Spanish billionaire behind clothing retailer Mango, who died in a climbing accident Saturday, the source said. Japanese cellphone billionaire Yasumitsu Shigeta also bid.

“Given the credit tenancy, bespoke location, high-end new construction and accretive rent structure, this was a highly sought after offering by several of the most aggressive buyers in the world,” JLL’s Keely Polczynski, who brokered the Oak Street sale, said in a statement.

The deal follows a string of Chicago retail and office purchases, including a $35 million deal for the popular Timeout Market food hall retail property in Fulton Market, by another Italian family, the Garavoglias, tied to the international spirits giant Campari Group.

The Oak Street property traded at a cap rate of just over 5 percent, meaning that Bottega’s rent likely provides more than $900,000 annually in net operating income to the landlord, taking the $17 million price into account.

“Should have been a sub-5 (cap rate),” Latsko said, calling the price a “robbery.”

A venture of Latsko and fellow real estate investor Mark Hunt bought the property for $10 million back in 2007, before a falling out that divided up their jointly held assets, with Latsko apparently taking over at 41 East Oak.

Latkso and Hunt in 2011 sold the nearby former Barney’s New York store for $117 million. That 97,000-square-foot property on Oak and Rush streets could become the next big Gold Coast retail deal. It’s being shopped by its current landlord ASB Investments, which is hoping to pull in $160 million by offloading the building.

Representatives of Max Mara didn’t return a request for comment, and the Maramottis couldn’t be reached. Andic’s family office Punta NA couldn’t be reached, and Mango didn’t return requests for comment. Shigeta couldn’t be reached via his wireless company Hikari Tsushin.

Bottega’s plan to move into the Oak Street space replaced a previous 10-year lease Latsko had struck with Parisian leather goods maker Maison Goyard, but that deal was blown up by a disagreement between Goyard and the landlord that resulted in a lawsuit.

Latsko Interests accused Goyard of dragging its feet on the deal by switching up its plans for a design and buildout, and failing to take possession of the property. Goyard blamed the landlord for the delays and tried to terminate its lease, despite having made changes to the interior construction plan throughout the process.

Goyard’s motion for summary judgment against the landlord was dismissed last month by Cook County Judge Thaddeus Wilson, and the litigation remains ongoing.