SOUTH BARRINGTON, IL-Sources say Boston-based Fidelity Real Estate has purchased the first mortgage loan for the 472,000-square-foot Arboretum of South Barrington mall, which opened in 2008, for $57 million. Developer Jaffe Cos. couldn’t pay the $90-million loan, but was able to work out a deal with Fidelity to remain as a minority partner on the property.

The lifestyle center opened strong in an area with excellent demographics, at the intersection of Higgins Road and Route 59. The center didn’t drop tenants; rather, it’s at 85% occupancy, with tenants that include LL Bean, Chico’s, Victoria’s Secret, Pinstripes and Ruth’s Chris Steak House, a total of more than 50 retailers and restaurants.

However, the center struggled to achieve its target rents. Jaffe, along with project equity partners RREEF and CalPERS, tried to work out a loan extension in 2010 with lender EuroHypo AG, but was unsuccessful. EuroHypo sued and the loan was put out for bid, but Jaffe was able to work out a deal to stay on the project as the other partners got out.

Presidnt of Jaffe Cos., Michael Jaffe tells GlobeSt.com that his firm contributed “significant cash” toward the $57 million, but admits Fidelity put in the bulk amount. He says he’s just happy a new partner allowed his firm to stay with the project. “To have partners and lenders who let you move forward with the asset is rare, it’s a testament to the relationships that we have that they understood that the real culprit was the economy,” he says.

Jaffe says the timing was important to be able to go to the upcoming International Council of Shopping Centers RECon convention, starting Sunday, with absolute certainty of who was running the Arboretum. “We’re very optimistic about the future of the center. We’re going to be able to show that our restaurants are doing $600 and $700 per square foot in sales, and our stores are around $400 per square foot,” Jaffe says.

More than three million people shopped at the mall in 2010, three times the amount that visited in 2009, he says, and same-store sales are in the double-digits. Retail is doing a lot better in the second quarter than many in the industry thought it would be doing right now, Jaffe says. “Most of us in the business, I think believe that retailers will be needing and wanting to grow stores in 2012 and 2013,” he says. “Of course, these retailers only will pick centers that don’t have a question mark, but we’ve seen traffic here building up, I believe we fall in the category of what could be called  a rare group of centers that made it through to the other side intact.”