M&R Development and Bucksbaum Retail Properties have taken a proactive approach, embodying the motto of Chicago Cubs great Ernie Banks, as they expand their ownership of the prominent North Side real estate opposite Wrigley Field. According to CoStar, the developers bolstered their share in the Addison & Clark apartment and retail complex through a refinancing agreement, resulting in the Swiss partner on the project, UBS Group, suffering substantial equity losses.
The property located at 1025 West Addison Street was acquired by M&R, Bucksbaum, and an affiliate of The Dinerstein Cos. for $100 million in late April, significantly lower than its construction cost of $180 million. UBS not only provided the original debt but also contributed most of the equity. While the refinancing deal will reimburse UBS’s $97 million loan, the firm’s property holdings affiliate experienced substantial equity erosion, as confirmed by M&R Chairman Tony Rossi. As a result, Houston-based Dinerstein has become the primary investor in the property.
Previously holding a 20 percent ownership stake in the project, M&R and Bucksbaum now possess an increased share, although the exact percentage remains undisclosed. To facilitate the transaction, the new ownership group secured a loan exceeding $65 million from Nationwide Life Insurance, resulting in a smaller loan amount but with a higher interest rate compared to the previous debt.
The current market climate has seen commercial properties selling below their initial purchase prices, influenced by rising interest rates, recession concerns, and disruptions in the banking sector, all contributing to a downturn in real estate activity nationwide. Despite these challenges, the developers of Addison & Clark remain confident in the complex’s recovery from the impact of the pandemic. With warmer weather, the baseball season, and nearby bars generating steady foot traffic in the area, M&R Chairman Tony Rossi expressed optimism, stating, “We’re seeing an excitement level… We feel like everything’s headed in the right direction now. That’s why we still believe in it, particularly at this lower cost basis.”
Currently, 90 percent of the apartments at Addison & Clark are leased, and this figure is expected to rise to 94 percent in the near future. Notable tenants in the retail segment include Nashville-based bar chain Tin Roof, occupying nearly 10,000 square feet, along with establishments like Harley-Davidson and Lucky Strike bowling alley.
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