Shopping center near Chicago sells for $100 million

A California-based real estate developer has sold a shopping center near Chicago for $100 million, one of the highest sale prices in the area in recent years, after buying it out of financial distress and refilling much of the space.

Red Mountain Group announced it has sold Algonquin Commons, an approximately 548,000-square-foot shopping center in Algonquin, Illinois, to Chicago-based investment firm Nuveen.

The sale price for the property along Randall Road was $100 million, in a deal completed Thursday, according to Kane County property records.

Algonquin Commons is anchored by Trader Joe’s and Fresh Market grocery stores.

Red Mountain’s sale wrapped up a major undertaking to revive the property it bought in 2021. The firm has since boosted occupancy from 60% to more than 90%, according to the Red Mountain statement.

“The sale of Algonquin Commons reflects the successful transformation of this 70+ acre shopping center into a dynamic, fun, and entertaining retail destination,” Red Mountain Group CEO and owner Michael Mugel said in the statement. “Through extremely creative deal making strategies, relentless tenacity, and lots of hard work, our leasing team was able to attract the strongest mix of tenants, elevate the communal shopping experience, and position the property for long-term success for the village of Algonquin. We’re absolutely confident that the center will continue to thrive and serve as a cornerstone of the community under its new ownership.”

It is one of the largest retail sales in Chicago’s suburbs in recent years. In another example of a grocery-anchored transaction, Blackstone in late 2021 paid more than $103 million for the Springbrook Prairie Pavilion in Naperville, Illinois. That property includes a Whole Foods.

Retailers at Algonquin Commons include Nordstrom Rack, Bob’s Furniture, Ulta Beauty, DSW, Old Navy, Dick’s Sporting Goods and Barnes & Noble.

Tenants added by Red Mountain include The Fresh Market, Top Golf, X Golf, Kids Empire and Five Below. Red Mountain also converted former department-store space in the center into a health and beauty hub, with spaces leased to Aveda, Salon Lofts, European Wax and Coco Nails, according to the statement.

The sale price is more than three times the $33 million that Santa Ana-based Red Mountain paid in 2021, with plans at the time to launch a $30 million turnaround of the property, Crain’s Chicago Business reported at the time. That purchase price was just a fraction of the $110 million in debt that the previous owner defaulted on, leading the property to be stuck in foreclosure for about eight years, according to Crain’s.

Nuveen, which is part of TIAA, declined to comment on the deal. Its purchase of the property was earlier reported by The Real Deal.

Algonquin Commons is more than 40 miles northwest of Chicago’s Loop business district.