CHICAGO—The partial economic recovery, and the resulting pent-up demand for new retail, has developers looking hungrily at the large underused or obsolete spaces scattered throughout the affluent north suburbs. And one of the top attractions was the old headquarters and manufacturing center of Klein Tools on the northwest corner of Touhy Ave. and McCormick Blvd. in Skokie. The family-owned company had moved its headquarters to Lincolnshire in 2006, but held onto the old property.
“The guys at Klein told me that they would get calls all the time from investors and retailers about selling,” Jack H. Rosenberg, a principal with Colliers International | Chicago’s industrial group, tells GlobeSt.com. “The property was screaming out for retail.”
The Lincolnwood Town Center has been across the street for decades, he adds, helping to build up a critical mass of shoppers. A Lowe’s Home Improvement was set up nearby just before the economic crash, and the village also recently approved the construction of a new Walmart on Touhy Ave.
“Skokie has always been very protective of their industrial area,” he says, due to the jobs it had provided for generations, but the Klein works “was a 60-year-old plant that really needed an upgrade, and eventually Skokie said, ‘we’re going to acknowledge this and we’re going to rezone it for retail to bring in some tax revenue.’”
That bet recently paid off when Centrum Partners LLC bought the nine-acre parcel. The Chicago-based developer closed the purchase on December 30 and plans to build a 75,000-square-foot Mariano’s Fresh Market grocery store on the site, along with a Longhorn Steakhouse, a bank, and other retail facilities. Site work has begun, including the demolition of old structure. According to Cook County property records, Centrum paid $9.75 million. Rosenberg and Colliers’ Frederick L. Regnery, another principal, represented Klein in the transaction.
“Almost everybody that put in a bid also put forward a plan which showed Mariano’s as an anchor tenant,” Rosenberg says. The key role now played by Mariano’s in north suburban development was also apparent last year when Rosenberg and Regnery marketed a 20-acre parcel in suburban Glenview once occupied by Avon Products Inc. Most of bidders on that property also proposed using the wildly popular grocer to anchor a major retail center. And officials from Regency Centers Corp., the successful bidder, plan a 75,564-square-foot Mariano’s for their new $29.6 million center, called Glen Gate, which they expect will open in fall 2014.
“The resurgence of the economy has led to strong retail demand and older properties — particularly in more mature, dense markets such as the North suburbs — need to be recycled to make way for newer developments that serve the current population’s needs,” Rosenberg says.