Tuesday, May 1, 2007

It's about time

If you look at this deal on the surface, it looks like another garden variety retail transaction in the south suburbs of Chicago, and yet another indicator of the growth of LA Fitness in that area. (They just built a huge location in Tinley Park next to the convention center, on land at 80 and Harlem that is highly visible but lacking the land and great access that you need for major retail.) Oh, and personally $30 net for strip tenants seems a little high to me.

What makes this otherwise ordinary deal so interesting is the amount of time it took to get done. This land was first in play around 1999 or 2000, as I recall, and even then Home Depot was the anticipated anchor. The village was very hot to get the site redeveloped, to the point that, as I recall, there were even veiled statements made about a Kelo-type taking of the land. Ten years to get a mid-sized, two anchor strip done is a bunch of time especially with the same major players. HD clearly wanted the site.

Everyone knew the deal would get done eventually, as the seller has a great new facility out in Matteson, which, alas, sits alone in the middle of a huge tract of land that ought to be a great intermodal park. (Come on, Shaw Company -- get it done! You are going to get passed by. Trust me, I know what's going down in the area.) So the seller gets what it wanted, the buyer is happy and you'll be getting some good retail in an area that really could use it. Patience = win-win.

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