Tuesday, March 25, 2014

Motor Row "Lacks Warmth"; O'Malley Solves Part of Litigation Problem

Chicago Business Daily recently had an article about the old Chicago Defender Building getting a new owner and leasee.
2400 S. Michigan. Photo from CoStar Group Inc.
After sitting empty for years, the historic former Chicago Defender building in Motor Row has a new owner and a new tenant.
Ventures led by Chicago developer Alexander Pearsall paid $6 million for the newspaper's former headquarters at 2400 S. Michigan Ave., an adjacent land parcel and small commercial buildings to the west and south of the Defender building, a city landmark, according to county records. The Pearsall ventures bought the properties from two investor groups led by Chicago restaurant operator Matthew O'Malley, the records show.
Mr. Pearsall also has leased the 50,000-square-foot Defender building and the 10,000-square-foot commercial structure at 2412 S. Michigan Ave. to events management and production company Revel Group, said Britt Whitfield, president of Chicago-based Revel.

While it's interesting that this old historic and once prominent building looks to be getting some TLC, there were two other items that were of more interest to us.

One was the new owners comment about the neighborhood:
The neighborhood has “no warmth to it yet. They're going to have to focus on the inside (of the building) rather than sell the district,” he said. 
Revel Group's Ms. Whitfield acknowledged Motor Row is still transforming, but she believes the market already exists for a new events space in the area. 
“There is a very big desire for groups coming into town for shows to stay as close as they can to McCormick Place,” she said. 
Ms. Whitfield envisions CEOs, for example, in town for a week for a convention staying in the ex-Defender building and using rooms in the property to hold off-site meetings.
While we don't disagree it was just strange to read.  Seems like a big duh.

Finally, and maybe the most intriguing thing in the article, was that this apparently has resolved a lingering issue for a South Loop retail pioneer:
The sale of the Defender building, meanwhile, has solved a legal hurdle for Mr. O'Malley, an owner of Chicago-based Mainstay Hospitality LLC, a restaurant group that owns the Chicago Firehouse Restaurant in the South Loop. 
Mr. O'Malley's venture bought the property in 2007 for $4.1 million, but following the real estate crash the group was never able to redevelop it. In 2011, Mr. O'Malley's lender filed a $3.3 million foreclosure suit against the property. The foreclosure case was dismissed in late February, following the sales, according to an online court docket.

As you may recall, in the fall of last year Mr. O'Malley penned a note explaining the situation and assuring the South Loop his current restaurants aren't going anywhere.

Phew...that was a lot!

But good news all around.  I think.

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