Business & Tech

Chicago Firm Buys Market Square for $35.5 Million

The firm, Chicago-based L3 Capital, told 'Crain's' it believes the rents are significantly under market rates.

A Chicago investment firm has purchased Lake Forest's Market Square for $35.5 million, according to a press release from the company.

L3 Capital owns a large amount of retail space in Chicago, including 24,500 square feet on Southport Avenue in Lake View, and this move to suburban retail space is something new for the firm, according to Crain's Chicago Business. 

A representative from L3 told Crain's they believe rents at the downtown shopping area are 10 to 20 percent below market.

Below is the full press release from L3:

LAKE FOREST, Ill. (November 14, 2013) – L3 Capital, a Chicago-based real estate investment firm focused on institutional-grade retail properties, has acquired Market Square, a historic retail property with 26 retailers and restaurants in Lake Forest, Ill., for $35.5 million.

“This is the most iconic property on the North Shore,” said Michael Schreiber, principal at L3 Capital. “Market Square has been a staple in this area for nearly a century and we believe our strategy of acquiring the best retail properties in top-tier cities will translate well here.  The North Shore, and Lake Forest in particular, is one of Chicago’s premier residential areas with impressive demographics. We are confident this investment will yield significant long-term value for our firm.”  

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Market Square was originally developed in 1916 for $750,000 as part of the Lake Forest Improvement Plan. Designed by legendary architect Howard Van Doren Shaw to resemble an English market square, it was officially the first designed shopping center in the country. Because of Market Square’s significance, portions of the development were added to the National Register of Historic Places in 1979.

Today, nearly 100 years after its creation, Market Square continues to be one of the premier retail locations on the North Shore and boasts an eclectic mix of national and local retailers, such as current locations for Williams-Sonoma, J. Crew, Bluemercury and Talbots, as well as local stalwarts like Kiddles Sporting Goods, Forest Bootery and The Lake Forest Shop. In total, Market Square currently has 26 retail and restaurant tenants.

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“Part of this asset’s appeal is that it attracts both national retailers and successful local businesses,” said Schreiber. “We have no intention of changing this formula, and, if anything, we hope to enhance this equation when opportunities to re-tenant arise.”

As part of L3’s strategy, the firm intends to invest heavily over the next two years in Market Square with an intensive marketing plan, infrastructure upgrades, life safety upgrades and historic restoration projects, said Schreiber.

“This property has significant historical importance and we want to treat any restoration projects with the utmost care and respect,” said Schreiber. “We look forward to working closely with the City of Lake Forest and the numerous community and historical preservation groups to assure that Market Square retains its historic charm, yet has the proper amount of investment to be a viable property for the next 100 years. It’s a very exciting undertaking and we feel honored to help preserve this development properly for future generations.”

The development consists of seven buildings and totals 100,000 square feet, with 50,000 square feet of retail and 50,000 square feet of office space. The addresses for Market Square include 653 Bank Lane, 659 Bank Lane, 722 Bank Lane and 675 Forest Ave. 

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About L3 Capital:

L3 Capital LLC is a real estate investment firm focused on institutional quality urban retail investments within first tier U.S. metropolitan markets. Based on an integrated team approach to real estate investment and management, each principal has a complementary skill set that includes acquisitions, capital markets/financing, and asset management. When properly combined, these independent skills form a competitive advantage. This combination of an operating capability with institutional investment experience creates the ability to identify inconsistencies, dislocations, value opportunities and overall superior risk-adjusted investments. To learn more about L3 Capital, please visithttp://www.l3capital.com


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