06 Oct Marina City retail space for sale by Pebblebrook Hotel Trust
With its unique cylindrical towers, Marina City stands with the Willis Tower, Tribune Tower and Wrigley Building high on a list of Chicago’s most famous landmarks. Now a big piece of the riverside complex is on a list of downtown properties for sale.
The owner of the 146,000-square-foot retail space in Marina City has hired a broker to sell the property, which is leased to multiple tenants including Smith & Wollensky steakhouse, Dick’s Last Resort and 10 Pin bowling alley.
While the architecturally bland retail space is overshadowed by the twin 60-story concrete towers that rise above, it’s a strong performer, with a 98 percent occupancy rate, according to a brochure from HFF, the broker marketing it. And its location, on the north side of the Chicago River between Dearborn and State streets, is hard to beat.
Pebblebrook Hotel Trust, a Bethesda, Md.-based real estate investment trust, took over the property last November, when it acquired LaSalle Hotel Properties, which owned the retail space and the Hotel Chicago, a 353-room hotel on the north end of the Marina City property. The sale did not include the two towers, which include 896 condominiums, or the House of Blues, which is controlled by concert promoter Live Nation.
An executive at Pebblebrook, which also owns the Westin Michigan Avenue, did not return calls. Since the LaSalle Hotel buyout, the REIT has been selling properties to pay down its debt load. It’s possible Pebblebrook decided it would be better off cashing out of Marina City, a large retail property that doesn’t fit with its core hotel business, while keeping the Hotel Chicago.
It’s unclear how much the Marina City would fetch. An HFF executive did not return calls. While many investors these days are wary of retail real estate, which faces a threat from online shopping—Marina City offers an “e-commerce resilient tenancy mix,” according to the HFF brochure.
Restaurants occupy 46 percent of its space, entertainment tenants occupy 25 percent and service businesses, 29 percent, according to HFF. Tenants include Spin, a ping-pong club, Bar Louie and Jefferson Beach Yacht Sales, which runs a riverside marina there.
Designed by architect Bertrand Goldberg, Marina City is one of Chicago’s most acclaimed Chicago high-rise developments, attracting gawking tourists since it was completed in the mid-1960s.
“This ‘city within a city,’ the first of its kind to layer residential, commercial, and entertainment uses into a dense high rise complex in the center city, was the most ambitious and forward-thinking post-war urban renewal project in Chicago in an era defined by ambitious urban renewal projects,” according to a 2015 city report.
The project originally included a skating rink and office building. But the Smith & Wollensky replaced the rink and the office building was converted into the hotel as part of a major redevelopment of the commercial space in the 1990s.