• Sun. May 26th, 2024

European Buyer Agrees To Pay More Than $35 Million for Time Out Market in Chicago


Apr 7, 2023
Time Out Market opened at 914-926 W. Fulton Market in Chicago in 2019. (Chipman Design Architecture)


A European investor agreed to pay more than $35 million for a building in Chicago’s Fulton Market district that is fully leased to a Time Out Market food hall, extending a run of deals in the high-demand area.

The sale price for the three-story structure at 914-926 W. Fulton Market equates to an anticipated annual rate of return of about 4.5%, according to people familiar with the deal. The unidentified buyer is from Europe, the people said.

The high price is the latest sign that investors covet properties in Chicago’s former meatpacking district, despite rising interest rates, concerns about a potential recession and recent bank failures that have made leases, property sales and developments more difficult to finance.

The sale of the 49,089-square-foot building marks the latest step at the property leased to the London-based publisher of Time Out entertainment magazines and websites. Time Out Group in 2017 agreed to occupy the entire property as part of an expansion of its food hall concept that debuted in Lisbon, Portugal, in 2014 in which magazine staff curate food stations from local chefs. The concept has been brought to New York, Boston, Montreal, Dubai and Miami Beach in Florida.

The sale has not been completed and still could fall apart. If it is completed, it would successfully wrap up an investment by Chicago-based partners L3 Capital and LaSalle Investment Management on a development that was finished just months before the arrival of COVID-19 shut down businesses such as Time Out Market.

L3 Capital and LaSalle Investment Management, an investment management subsidiary of JLL, bought the two-story former home of El Cubano Wholesale Meats for $14.55 million in 2016, with the initial intention of redeveloping it. After the building was deemed structurally unsound by the developers, it was demolished and replaced with a larger three-story building with rooftop seating.

A spokesman for LaSalle Investment Management declined to provide comment to CoStar News on the pending sale. L3 Capital executives did not respond to requests for comment from CoStar News.

Construction of the Chicago building was completed in late 2019, just a few months before the pandemic led to a pause in operating the space.

With a $17 million construction loan from Byline Bank about to mature in December 2020, less than a year into the pandemic, the developers negotiated an extension of the loan maturity until December 2023 with the possibility of another one-year extension into late next year, according to Cook County property records.

The ongoing sale of the Time Out Market building adds to a wave of real estate activity in the area west of Chicago’s Loop business district. Over a recent five-year period, the area was the fastest-growing urban office market in the country with an average 100% annual increase in supply, according to a CoStar analysis.

Thousands of apartments are under construction or planned in the neighborhood, including Related Midwest’s soon-to-be-completed, 495-foot-tall tower at 164 N. Peoria St. that will be the tallest in Fulton Market.

Thor Equities also has a $100 million-plus deal to buy a 2.7-acre site from Nealey Foods, where the New York-based developer is believed to be planning multiple towers that could include a mix of residential and office space.

L3 is an active investor in Fulton Market, as well as in other areas of the city and throughout the country.

In the Gold Coast luxury shopping district, L3 is redeveloping the longtime Carmine’s Bar & Lounge property on Rush Street into a new multitenant building where Carmine’s will reopen. Nearby, the firm has landed high-end watch seller Burdeen’s Jewelry as a tenant in a former Northern Trust bank branch building on Oak Street.

CBRE broker Keely Polczynski is representing the sellers.

Leave a Reply

Your email address will not be published. Required fields are marked *