The revised former South Side Target comes onto the market


The offer will test investor appetite for commercial real estate in a part of the city not known for generating high returns for developers. But the building at 11840 S. Marshfield Ave. could go a long way in changing that, said Walker, who expects the 129,000-square-foot lot to raise bids of around $ 20 million.

A sale near that price would likely make a big payday for DL3 thing signed a 10-year lease in 2019 with parent company of health insurer Blue Cross & Blue Shield of Illinois to convert the vacant business into a Blue Door Neighborhood Center and office building with more than 500 new jobs. Shortly thereafter, according to Cook County’s real estate records, the developer paid $ 250,000 to purchase the property from Target, though Walker said another “$ 10 million commitment” was required to get the building for its new use to renovate.

DL3 refinanced the property with a nearly $ 4.9 million loan in July 2020, real estate records show.

Getting a strong return on the property would send the message to other private investors that money can be made by investing money in areas of Chicago that historically haven’t gotten enough, Walker said.

“We have been creative about what might be possible, and it means that others can come and imagine what is possible in our neighborhoods,” said Walker, noting that he started conversations about the project since it was on its way to an empty, dated store in the midst of a “retail apocalypse” with more people shopping online.

“I think it’s a positive signal to investors and the stock market that you can conduct innovative transactions with the right partners in these neighborhoods.”

Walker has at least one current trend on his side: During the pandemic, commercial real estate investors paid premiums for properties with creditworthy single tenants with long-term leases, which puts building owners at risk in the uncertainty of the crisis.

Blue Cross Blue Shield’s lease runs through May 2030, and the building is expected to generate more than $ 1.3 million in annual net operating income, according to a JLL flyer. The insurance company also spent around $ 20 million on expanding its space on the property, according to the brokerage firm.

The offer also comes just weeks after DL3 announced a similar turnaround in the Chatham neighborhood, where it is converting Another vacant former Target store into a call center for Riverwoods’ financial services giant Discover, which is slated to create 1,000 new jobs in the neighborhood by 2024.

Such deals were few and far between in predominantly black communities in the south and west, which have long had problems with large retailers closing their stores. Dwindling populations and commercial corridors filled with empty storefronts have deterred even some of the most socially conscious community developers from taking on new projects in such neighborhoods.

Walker said Blue Cross Blue Shield and Discover will hopefully spur other businesses to revitalize disinvested Chicago communities and develop a local, but overlooked, deep workforce.

“We show and demonstrate the viability of the communities, the neighborhoods – all of the key metrics their businesses are looking for,” he said.

DL3 has been one of the South Side’s most active commercial property developers in recent years. The company developed a Whole Foods-anchored mall in Englewood in 2016 and helped develop a Jewel-Osco in Woodlawn, the district’s first full-service grocery store in more than 40 years.

Brian Shanfeld and Alex Sharrin of JLL are marketing the Morgan Park property on behalf of DL3.

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