Hutensky is Betting Big on Chicago’s Suburban Retail

Ah, the New York hustle runs in the veins. In the world of real estate, this mix of determination and strategy takes center stage with Brad Hutensky’s latest adventures. And this time, the stage is none other than suburban Chicago.

Brad Hutensky’s New Moves

Brad Hutensky isn’t playing small in the windy city’s retail game. Armed with a $63 million check, he snagged the massive 486,000-square-foot Bloomingdale Court, right in the western suburbs. But that’s not all. Hutensky Capital Partners, his Connecticut-based firm, also got their mitts on the 364,000-square-foot Lake View Plaza in Orland Park. That’s the kinda move that makes you pause and say, "bravo!"

Financing the Ambitious Acquisitions

What’s interesting here is how Washington Prime Group, rolling their investments into the sunset, sold these properties. Their spinoff from the Simon Property Group held Bloomingdale for over 15 years. Meanwhile, Hutensky didn’t spill the total price beans, but records show he secured a $68 million loan from New York Life Insurance Company. That’s about $74 per square foot.

The Shopping Scene Soars and Settles

After the pandemic, open-air shopping centers saw a boom. But now, the flame has tapered off a bit. Nevertheless, Hutensky’s confidence remains unshaken. In fact, he mentions a strong retail market and views these centers as fantastic catchments. The guy’s got his eyes set on power shopping centers over grocery-anchored assets. And why not, considering Cushman & Wakefield report a 3.4% shopping center rent growth with mean asking rents resting at $24.53 per square foot? Rent growth cooled, yet staying competitive isn’t the easiest game with only 6.4 million square feet added to the market this year. The landlords now hold the cards with a 5.4% vacancy rate, making tenants scuffle over prime spots.

Macy’s Moves Back in Bloomingdale

The juice of retail doesn’t stop here. Macy’s, a retail giant, bet on a 35,000-square-foot space in Bloomingdale, as they shift gears toward smaller format stores. The nearby Stratford Square Mall bid goodbye, spotlighting Macy’s pivot. But the Bloomingdale location is shining bright, thanks to these strategic changes.

A Shift Away from Enclosed Malls

Brad feels the winds changing from enclosed malls to these life-filled open-air centers. As evidence, Macy’s closing in Stratford Square Mall echoes this grand shift. Meanwhile, Bloomingdale’s endeavors to revamp Stratford Square involving lawsuits with Namdar Realty ended with the village seizing the opportunity to redevelop.

Hutensky’s Portfolio Evolution

Besides these hefty buys, Hutensky owns the Wheaton Town Square shopping center in Wheaton. Back in 2015, Hutensky teamed up with Tucker Development from Chicago, spending $57 million for it. Fast forward to 2021, the firm outlined a $31 million spree on shopping centers in Hillside and Oswego. Though the Oswego property saw a sale last September, it’s evident Hutensky’s hungry for more deals.

Current Tenants

What’s happening within these gleaming properties? Bloomingdale Court flaunts tenants like Ross Dress for Less and Joann Fabrics. There’s still about 44,000 square feet waving its arms for eager lessees. Meanwhile, Orland Park hosts giants like Best Buy and Petco, with 18,000 square feet yearning for tenants.

Want to Dive Deeper?

For the real estate aficionados itching for more, you can explore Chicago’s retail revitalization and Hutensky’s past ventures in the thriving suburbs. And should you want to delve into Hutensky’s acquisition spree, check this previous acquisition – it’s a thrilling read.

No word yet from the flow of CBRE’s Christian Williams, George Good, and Michael Wilson, the brokers behind Hutensky’s acquisitions. So, what’s next? Stay tuned, because in real estate, the story’s never over!