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CHICAGO-The new owners of the Presidential Towers apartment complex plan to renovate the retail of the 2,346-unit development. The complex consists of four 50-story towers located on 5.8 acres bordered by Madison, Clinton, Monroe and Des Plaines streets. Waterton Associates LLC, based here, in a joint venture with the California State Teachers Retirement System acquired the property in April for $470 million, as previously reported by GlobeSt.com.

Northern Realty Group Ltd., based here, has been chosen as the retail consultant and developer as well as the leasing agent for the project. Bruce Kaplan and Leslie Mader will lead the development. Valerio Dewalt Train will be the architect for the project and Lyons Realty Advisors will assist with studies, concept development and plan execution.

The four-building development has approximately 110,000 sf of retail space on the ground and second levels. The retail space will be reconfigured and expanded to between 140,000 sf and 150,000 sf, says Bruce Kaplan, president of Northern. Specifically, a “modest-sized” health club may more than double in size to about 55,000 sf, Kaplan says. The property owners have been contacted by a couple of “name-brand operators” of health clubs that would like to be tenants and see the health club expanded. Kaplan said that he could not disclose the identities of the health club operators at this time. The health club has a large outdoor deck area that has a running path and basketball court. The outdoor area may be enclosed with the expansion of the aerobics area, and an indoor running path and basketball court, he says. The amount of retail space will also be slightly increased by having the retail face outward and by turning the internal corridors into rentable space.

The majority of the retail space is currently only accessible from inside the building. The complex was completed in 1986. “It was not the nicest part of Chicago. It was in a sea of parking lots,” Kaplan says. “It was really quite unfriendly to pedestrians.” The retail in the towers was designed to “have all the necessities of life contained within the buildings itself,” he says. In the past 20 years, the complex has become surrounded by office and residential developments. “The area has gone through this absolutely exponential growth in terms of office and in terms of residential density,” Kaplan says. The retail space will be redesigned “embracing the pedestrian traffic.” The retail space will have new store fronts, signage and streetscaping, he says.

The retail space in Presidential Towers is currently about 90% leased. Tenants include several restaurants including a McDonald’s and Potbelly’s Sandwich Shop, which signed a 10-year lease in April before the sale. Tenants also include a florist, a cellular phone business, dentist, salon, grocery store, dry cleaner and coffee shop. The asking lease rate was not disclosed nor was an estimate for the cost of the redevelopment. The redeveloped retail space will likely still be service retail but will be retail geared to tenants as well as surrounding residents and office workers, as opposed to geared only to the residents of Presidential Towers. Likely tenants will be a grocery market, pharmacy, home improvement store and a variety of restaurants including limited service, quick service and sit-down restaurants, Kaplan tells GlobeSt.com.

Renovation work will probably begin in next summer and take about nine months to complete, Kaplan tells GlobeSt.com. Northern Realty will have to receive approval from the owners and the firm will also have to receive city approval, he says. The apartment complex consists of studio, one- and two-bedroom units which are currently 96% occupied. The owners plan renovations to the units, lobby and common areas, Kaplan says. The towers also have a five-story parking garage with 1,159 parking spaces.

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