Investor acquires retail center after debt slashed
(Crain’s) — A Dominick’s-anchored suburban shopping center that was facing foreclosure was sold to a local investor who has acquired other retail fixer-uppers.
A venture of RMS Properties Inc. acquired the Hoffman Village Shopping Center in northwest suburban Hoffman Estates after the property's lender agreed to forgive about $10 million of debt, according to property documents. Schaumburg-based RMS took over the 158,313-square-foot center at 2503 W. Golf Road from an investor group including concert pianist Paul Schenly that bought the shopping center for $23.4 million in 2005.
Wells Fargo, acting as a trustee on behalf of commercial mortgage-backed securities bondholders, filed a foreclosure suit in January 2009 alleging that Mr. Schenly's group had defaulted on a $19.4-million mortgage. But a loan servicer recently agreed to reduce the loan balance to $9 million, paving the way for a sale to RMS.
Related story: Foreclosure suit hits suburban retail center
It's unclear what, if anything, RMS paid for the property, which is 66% leased. RMS President Ron Shoffet didn’t return calls.
RMS has bought vacant or mostly vacant shopping centers in Wheaton, Westmont and Burr Ridge, according to media reports.
“Companies like RMS are in the position to use their expertise to build up this type of shopping center again,” says Ben Wineman, a senior vice-president with Oakbrook Terrace-based Mid-America Real Estate Group LLC, which represented the special servicer in the sale. He declines to discuss financial terms of the transaction.
The shopping center, at the southeast corner of Golf and Barrington roads, has been anchored for more than 20 years by Dominick’s, which accounts for 45% of the space in the center. Dominick’s completed a $3-million remodeling of the store’s interior in 2008 and is negotiating to extend its lease another 10 years, Mid-America says in its marketing materials.
