BlackRock Lists Chicago Retail Center Amid Soft Market

BlackRock is preparing to exit a long-held investment in Chicago’s South Loop.

The New York-based asset manager listed Southgate Market, a 300,000-square-foot retail center at 1101 South Canal Street, CoStar reported. CBRE’s Christian Williams, George Good, Madalyn Ladd, Peter Meyer and Richard Frolik are managing the listing. The asking price wasn’t disclosed.

Under CEO Larry Fink, BlackRock has invested roughly $6.5 million ($22 per square foot) in capital improvements to Southgate Market over the last four years. The shopping center, on 6.5 acres near the corner of Roosevelt Road and the Old Main Post Office, is 79 percent leased.

Tenants include LA Fitness, Marshalls, PetSmart and DSW. Whole Foods, the anchor tenant occupying 55,000 square feet, has 14 years left on its lease following a 10-year extension. The average lease term across the property is 8.42 years, with a projected first-year net operating income for the buyer of nearly $5 million.

The property is managed by Los Angeles-based Pacific Retail Capital Partners.

The Southgage shopping center is hitting the market amid ambitious plans for the South Loop, such as 601W’s Canal Station and Related Midwest’s 62-acre megadevelopment known as The 78. Canal Station is converting 801 South Canal Street into modern office space, while The 78 could draw a stadium deal from the Chicago White Sox or Chicago Fire.

BlackRock recently expanded its headquarters at Related’s 50 Hudson Yards by adding 50,000 square feet to its space. The firm already leases nearly 1 million square feet across 15 floors in the tower.

The Chicago retail market is facing challenges, particularly in areas like the Magnificent Mile, where retail vacancies are significant, and several major retailers have exited, leading to uncertainty for property owners. However, there are signs of optimism in suburban areas, with demand for shopping centers, as evidenced by recent high-value transactions and redevelopment efforts.

— Andrew Terrell