Struggling Evergreen Park mall hits market after loan sale fails

(Crain’s, November 25, 2014) – The foreclosure process for one of the oldest—and emptiest—malls in the Chicago area has restarted after a deal collapsed that would have given a Florida real estate developer control of a loan on the property.

Tampa-based DeBartolo Development last year said it would buy a defaulted loan on the Plaza, a 733,986-square-foot mall near 95th Street and Western Avenue in Evergreen Park.

But the loan sale fell apart, confirmed S.L. Van der Zanden, CEO of Resolutions, a Chicago-based company that’s serving as a court-appointed receiver for the mall during the foreclosure process.
The servicer of the loan, Houston-based Situs Holdings, is now forging ahead with the foreclosure and has hired a broker to sell the property, said Van der Zanden.

The loan sale closing date “was extended numerous times and the decision by Situs at this point in time was, they’d prefer not to provide additional extensions on the contract,” he said. “So the contract expired.”

Van der Zanden said he didn’t know why the loan sale fizzled. DeBartolo representatives did not respond to messages. A Situs spokesman declined to comment.

MOSTLY EMPTY MALL

The Plaza, which currently has just four tenants and more than 458,000 square feet of empty, enclosed mall space, is owned by a group of investors led by Kansas City, Mo.-based Provo Group, which is said to be cooperating with the foreclosure. Bruce Provo, president of his namesake firm, said his group is cooperating with Situs, and has agreed to give up the property.

DeBartolo’s loan purchase was the first step the firm needed to ultimately take over the mall, demolish it and redevelop the 30-acre site with a $112 million shopping center. In a statement, the firm said it didn’t acquire the loan because it is busy working on other projects.

“After evaluating the opportunity, we decided to focus our resources in the Chicago market on the Optima towers downtown,” the company said in the statement. “We are in the process of beginning construction on a 1.4 million-square-foot regional shopping center in Kapolei, Hawaii, and didn’t want to add any additional regional centers at this time.”

In October, the Village of Evergreen Park signed a memorandum of understanding regarding a redevelopment plan with UP Development, a real estate firm based in suburban Nashville.

The village will negotiate “exclusively” with UP over the redevelopment of the Plaza site through Jan. 31, including over a financial-incentive package for a 440,000-square-foot project on the site, according to a copy of the document.

Under the terms of the memo, the village says it will consider providing UP with around $10 million in funds raised through a new bonding district on the property, provide a sale-tax reimbursement to the firm and issue other incentives.

Evergreen Park Mayor James Sexton said the village wants to work with UP and won’t negotiate over incentives if a new buyer emerges to buy the property. He said UP was partnering on the project with DeBartolo, which the Tampa-based firm shot down in their statement.

“If we don’t get it going soon, and if we don’t get it going soon with the people we’ve talked to for two years, we’re out,” he said.

DEMOLITION EXPECTED

“It’s a remarkably urban, in-fill and probably mostly retail redevelopment site,” said Ben Wineman, principal at Mid-America Real Estate, the Oak Brook-based brokerage selling the Plaza. He expects a future owner will seek to demolish the existing mall, given its age and how it is configured.

No buyer has been picked for the mall, he said.

“It’s a wide open playing field” right now, Wineman said.

The Plaza currently has just four tenants, according to Mid-America marketing materials: a Carson Pirie Scott department store, a Planet Fitness gym, an Applebee’s restaurant and an Enterprise car rental office.

Carson has extended its lease until 2023, and the gym has a lease for its space until 2021, according to the materials. That could complicate plans developers might have to raze the mall and build anew, since those tenants would have to be accommodated in the project or bought out of their leases.

The Plaza was developed by famed Chicago developer Arthur Rubloff in the early 1950s. Later, he converted the property into an enclosed mall, one of the first in the area.

After trip through foreclosure, Glen Town Center has new Owner Dick's Sporting Goods is among the stores at Glen Town Center in Glenview.

(Crain’s, May 21, 2014) – Dick’s Sporting Goods is among the stores at Glen Town Center in Glenview.

About eight months after being repossessed by its lender, the Glen Town Center retail development in Glenview sold for a fraction of what was owed on the property when it fell into foreclosure.

A venture of Dallas-based Tabani Group Inc. paid an affiliate of U.S. Bank N.A. nearly $25 million for the 267,000-square-foot shopping center on the site of the former Glenview Naval Air Station near Lake Avenue and Patriot Boulevard, according to a person familiar with the deal. A Tabani spokeswoman confirmed the acquisition but declined to say what the company paid.

The sale represents a big loss for investors who own mortgage bonds backed by the debt on the property. U.S. Bank said Glen Town Center’s developer, an affiliate of San Diego-based OliverMcMillan LLC, owed $55.6 million when the lender filed to foreclose on a defaulted commercial mortgage-backed securities (CMBS) loan almost two years ago. The property was seized through a foreclosure sale in September.

OliverMcMillan borrowed the money on the Glen in 2006, when a robust economy and retail market prompted landlords to take out loans with the expectation that rent growth and tenancy at their properties would remain strong. Instead the market crashed, and retail property values plunged.

BIG HAIRCUTS

“This is not an uncommon story,” said Joseph McBride, an analyst at New York-based research firm Trepp LLC. For delinquent CMBS loans on retail properties originated before the crash, “when you did see a revaluation, it was as much as a 50 percent haircut on the appraised value.”

The Glen generated about $1.7 million in net cash flow before debt payments in 2013, less than the $3 million in debt payments due that year, according to a Bloomberg L.P. report about the loan. Net cash flow is up 14 percent vs. the 2010 bottom but still 50 percent less than 2006′s total of $3.3 million.

The deal is Tabani’s first acquisition in the Chicago market. The company owns 21 retail properties, including shopping centers and huge malls, in markets in Texas, Cincinnati and suburban Indianapolis, according to its website.

‘VERY EXCITED’

“We’re very excited about the acquisition,” the spokeswoman said. “The Glen Town Center is a prime shopping destination for the area.”

For Tabani, the question is whether the firm can latch on to a retail market recovery that favorsthe strongest properties in the best locations.

Despite the Glen’s Main Street-style design and its proximity to affluent consumers in the northern suburbs, the property has struggled over the years — even before the crash — in part because it’s considered difficult to get to. Tabani will carry out an “aggressive” marketing campaign for the Glen and plans to organize more events at the property to draw in additional shoppers, the spokeswoman said.

Buying the Glen at a low value gives Tabani the flexibility to offer attractive rents to retailers and still generate a decent return.

CAN ‘GET CREATIVE’

It gives the company the chance “to get creative with tenants and offer up incentives to attract groups that may not otherwise have gone there, if they were looking at similar rents along a more accessible and visible corridor like Willow or Waukegan road,” said broker Michael Marks, senior director in the Chicago office of Cushman & Wakefield Inc. who focuses on retail property sales.

The current tenant lineup at the Glen includes Dick’s Sporting Goods, a Yard House restaurant and Ulta Salon, Cosmetics & Fragrance Inc. A Von Maur department store, a movie theater and nearby apartments are owned separately.

In 2011 the occupancy rate at the property was 84 percent, but Chicago-based RE|SOLUTIONS, a receiver that managed the property starting in late 2012, during the foreclosure proceedings,signed several new tenants, boosting the rate to 90 percent as of late last year.

A spokeswoman for Minneapolis-based U.S. Bank declined to comment; the lender filed the foreclosure suit and took back the property in its role as trustee for investors in the CMBS loan. A media representative for Houston-based Situs Holdings LLC, a loan servicer that managed the CMBS debt on the property, did not return a call.

Ben Wineman, a principal at Oakbrook Terrace-based Mid-America Real Estate Corp. who handled the sale for Situs, did not respond to a call.

Smoothies, shakes, fries and fashion in Glenview

(Crain’s, November 8, 2013) - Four new stores are coming to the Glen Town Center in the northern suburbs, a bright spot for a once troubled shopping complex as it courts buyers.

The new leases, which total nearly 11,700 square feet, bring occupancy of the center’s lender-owned retail space to 90 percent, confirmed S.L. van der Zanden, managing principal and CEO of Chicago-based RE|SOLUTIONS, which manages the Glenview property.

Houston-based Situs Cos. is trying to sell the space, which encompasses nearly 267,000 square feet, after taking ownership through a foreclosure suit filed last year against the center’s developer, an affiliate of San Diego-based OliverMcMillan LLC.

“We lifted the cloud of the delinquency and the foreclosure action and let people know that there is someone here in charge,” Mr. van der Zanden said. “We were ready to do deals, and
they came forward.”

Located on the site of the former Glenview Naval Air Station, the complex also includes a Von Maur, the Regal Glen Stadium 10 cinema and apartments that are owned separately. Including the department store and movie theater, the shopping center is about 96 percent leased, according to Joe Parrott, a senior vice president with Los Angeles-based CBRE
Inc. who handles leasing.

Among the new tenants at the Glen is Houston-based Pinot’s Palette, an upscale wine-and-art franchise that is breaking into the Chicago market, where it will compete with similar concepts like Bottle & Bottega and Arts n Spirits.

Pinot’s, which is also opening a Naperville location, leased 2,500 square feet at the Glen and plans to open the studio in January, said franchisee Mari Sokolowski, who also serves as franchise development director for the company, which has 61 locations open or slated to
open.

Mingle Juice Shop, meanwhile, signed a three-year, 1,180-square-foot lease for its first location, slated to open in March, confirmed Kimberly King, managing partner for the business. The store will target health-conscious consumers, serving fresh-squeezed juices and smoothies and a variety of grab-and-go food items, Ms. King said.

Rounding out the list of new tenants: MOOYAH Burgers Fries & Shakes, a fast-casual burger chain based in Plano, Texas, which leased about 2,000 square feet, and Curragh Traditional Irish Pub, which took 6,000 square feet. Curragh also has locations in Chicago’s Edison Park
neighborhood, Skokie and Holland, Mich.

Additionally, former business partners Stella Chun and Grace Yoon, which ran the Stella + Grace women’s clothing boutique in the center, have closed that business and opened their own stores, which total 2,274 square feet, Mr. van der Zanden said.

The value of the 267,000-square-foot retail portion of the complex plummeted during the recession, when it failed to generate enough income to cover its debt service costs, leading to the default.

Occupancy dropped as low as 84 percent in 2011, according to Mr. van der Zanden.

‘NO EVERYDAY DRAW’

While the new leases are a positive sign for the center, its tenant mix and location away from main thoroughfares continue to pose a challenge, said Tony Kahan, a partner with KB Real Estate Inc., a Northfield-based retail broker and developer.

“There’s no everyday draw bringing you into the shopping center,” Mr. Kahan said. “You don’t have that Whole Foods anchor . . . that grocery anchor that is going to bring people in from outside the community and inside the community.”

Situs is a so-called special servicer that oversees the property on behalf of investors who own bonds backed by mortgages on a pool of properties, including the Glen.

The company took title to the 267,000-square-foot portion after a foreclosure auction earlier this year, according to property records. A Situs spokeswoman did not return a call.

“OliverMcMillan is glad to hear of new leases at Glen Town Center,” the company said in a statement. “We keep a keen interest in its success as owners of the theater and the Aloft
apartments and as managers of the parking.”

Situs has enlisted Oakbrook Terrace-based Mid-America Real Estate Corp. to sell the 267,000-square-foot portion of the center. The property is being marketed without an asking price. The Von Maur and movie theater are not part of the sale.

The Glen Town Center Announces New Retailers and Restaurant

Glenview, IL – (November 7, 2013) – RE|SOLUTIONS is pleased to announce many new tenants recently joining the Center. They include The Curragh Irish Pub & Restaurant, Ella Louvi and Stella315 women’s clothing and accessories boutiques, Mingle Juice Shop, a healthy juice and smoothie bar, MOOYAH Burgers, Fries & Shakes, Pinot’s Palette, a unique destination for wine and painting, and announces new locations for Glen Orthodontics, P.C. and the newly expanded Dino’s Sports Fan Shop.

“We are very proud of the positive change in momentum since taking over management last December. The quantity and quality of these new tenants speaks volumes about how the Center has turned around” said S.L. van der Zanden, Managing Principal for RE|SOLUTIONS.

“At The Glen, we’re committed to offering our patrons a wide range of incredible dining experiences, as well as top of the line retail and service options within a single, neighborhood location.”

“We welcome Ella Louvi, Stella315 and Curragh Irish Pub & Restaurant to The Glen, and are thrilled our veteran tenants, Glen Orthodontics and Dino’s Sports Fan Shop, are able to provide their unique services at more convenient, and, in the case of Dino’s, more spacious locations for their customers”, said Tom Sikoral, Senior General Manager for RE|SOLUTIONS.

RE|SOLUTIONS completes 60,000 sf lease for Gordmans at retail center in O’Fallon, Missouri

RE|SOLUTIONS successfully completed a lease renewal for a 60,000 sf Gordmans, the anchor department store tenant at the O’Fallon Walk shopping center.  In its role as court-appointed receiver and property manager for the troubled O’Fallon, Missouri community shopping center, RE|SOLUTIONS  was able to a stem the tide tenant departures.  Based out of Omaha, Gordmans currently operates 73 department stores across 16 states stretching from Colorado to Tennessee

After foreclosure, Glen Town Center goes up for sale

(Crain’s, August 15, 2013) The Glen Town Center, a foreclosed shopping complex in Glenview, is up for sale.

A venture of Houston-based Situs Cos. has completed a $55.6 million foreclosure suit on about 267,000 square feet of retail space in the apartment-and-shopping compound, according to a Bloomberg L.P. report about the property’s debt, taking the space back from an affiliate of San Diego-based mall developer OliverMcMillan LLC.

Situs, a loan servicer that oversees the property for investors who own mortgage bonds backed by it, has hired Oakbrook Terrace-based Mid-America Real Estate Corp. to sell the property. A Situs spokeswoman did not respond to requests for comment.

The property is being offering without an asking price, Ben Wineman, a Mid-America principal, said in an email.

Located on the site of the former Glenview Naval Air Station, the Glen Town Center includes a Von Maur store, a movie theater and apartments that are owned separately.

The shopping center has struggled, losing money each year from 2007 to 2011, according to the Bloomberg loan report. The property is currently about 90 percent leased, according to S.L. van der Zanden, managing principal and CEO of Chicago-based ReSolutions, the court-appointed receiver for the property.

In 2011, the last year for which data is available, the property generated $1.7 million in net cash flow before debt service, as compared to close to $3 million in loan payments due that year.

The buyer pool for the property may be limited because the Glen’s retail space doesn’t fit traditional categories investors seek, said Chad Firsel, president of Chicago-based Quantum Real Estate Advisors Inc.

“The challenge there is it doesn’t fit in a box … in the sense that it’s not grocery anchored and it’s not a true power center,” Mr. Firsel said. Despite wealthy consumers that live nearby, the property isn’t located on any of the key north suburban shopping corridors, he added.

OliverMcMillan declined to comment.

RE|SOLUTIONS Begins Receivership of the Glen Town Center

(December 17, 2012) In connection with a $55.6 million foreclosure suit, S.L. van der Zanden of RE|SOLUTIONS has been appointed the receiver of the Glen Town Center.  The developer, a venture of San Diego–based OliverMcMillan, has consented to its receivership appointment on the project’s 267,000 square feet.  According to a loan report from Bloomberg L.P., the retail property securing the loan has not generated enough cash flow to cover the debt service since 2009.

The Glen Town Center is the centerpiece of The Glen, a twelve-hundred acre master-planned community on the site of the former Glenview Naval Air Station and its historic Hanger One.  The Glen Town Center features pedestrian-friendly parkways and sidewalks connecting residents to the 1,150,000 square feet of retail shops, entertainment venues and residential dwellings.

RE|SOLUTIONS Appointed Receiver of site of former New City YMCA

(Crain’s, September 22, 2011) - Receiver named for former New City Y site – Resolutions, a Chicago-based real estate firm, said it has been appointed the receiver for the site of the former New City YMCA on the near North Side. A joint venture between Chicago-based Structured Development LLC and Wilton, Conn.-based Commonfund had planned a mixed-use project with 490 apartments and about 450,000 square feet of retail space but got hit last year with a foreclosure suit on the site at the corner of Clybourn Avenue and Halsted Street. Structured is working to pay off the loan and bring in new partners, including former General Growth Properties Inc. CEO John Bucksbaum, to replace Commonfund but has yet to finalize a deal. A Structured executive was not immediately available Thursday.

RE|SOLUTIONS completes Receiver Sale of Akron industrial building in only 16 days

While acting as Receiver/Property Manager during the foreclosure process of the Kennedy Business Center, a 170,000 sf industrial building located in Akron, Ohio, we collected offers from credible buyers, identified and recommended the highest and best offer and completed the Receiver Sale in only 16 days

RE|SOLUTIONS assumes management of Glenlake Professional Center

(Crain’s, September 22, 2011) – Glenview medical office heads back to lender  A receiver says the owner of a five-story Glenview medical office building has arranged a deed-in-lieu of foreclosure with its lender after being hit with a foreclosure suit over a $10.6-million loan. RE Solutions has been appointed receiver of Glenlake Professional Offices, an 83,908-square-foot building two blocks from Glenbrook Hospital. The building, 3633 W. Lake Ave., is 73% occupied, down from 93% just five years ago, according to a loan report from Bloomberg L.P. A venture led by Marc A. Harris, president of Chicago-based Summit Real Estate Investments Inc., paid $13.1 million for the property in 2006 and financed the purchase with a loan from UBS A.G. that was later sold to investors in a commercial mortgage-backed securities offering. Mr. Harris’ venture was hit with a foreclosure suit in May.