State Street store shuffle
By: Micah Maidenberg
New York investor Joseph Sitt has a big space to fill after losing a longtime State Street retail tenant to a building two doors north.
Forever 21 Inc., a Los Angeles-based apparel chain, signed a lease to open a two-level, 17,159-square-foot store at 10 S. State St., according to New York-based Robert K. Futterman & Associates LLC (RKF), which represented the tenant. Forever 21 plans to move to the space next year from its current 30,000-square-foot store at 34 S. State St., a property owned by a venture of Mr. Sitt’s Thor Equities LLC.
“While they have a large footprint to fill, they can now go to national retailers and say, ‘It’s 30,000 square feet. It’s a flagship, and here are all the retailers that have come in” to the market recently, said John Vance, vice president of Chicago-based Stone Real Estate Corp. who wasn’t part of the deal. “It should lease. It will lease.”
Anchored by the Forever 21, the retail property at 26-36 S. State St. that the Thor venture owns has performed well, reflecting rising retail rents and better occupancy rates in Loop. The property, whose tenants also include a Dick Blick Art Materials outlet and a Verizon store, generated nearly $3.2 million in net cash flow last year, up 35 percent from 2008, according to a Bloomberg L.P. report about a loan on the property. A Thor spokesman did not return a call or an email message.
REPLACING A RIVAL
Forever 21 will replace one of its rivals at 10 S. State, San Diego-based Charlotte Russe Holding Inc., which agreed to sublease the space six years ago. It’s unclear whether Charlotte Russe plans to open another store nearby. An executive for the chain did not return a message.
The other tenants at 10 S. State are Urban Outfitters, with about 14,000 square feet, and a 22,000-square-foot Office Depot. The property is owned by a partnership advised by John Myers, an executive with Katonah, N.Y.-based Ceres Real Estate LLC.
Mr. Myers did not return a call, nor did a broker at Cushman & Wakefield Inc. who leases the property.
Forever 21 targets young shoppers, offering a broad line of affordably priced apparel, such as a $15.80 denim dress and a men’s two-button blazer for $35, according to its website. The chain has 13 stores in the Chicago area.
Anthony Campagni, managing director in the local office of RKF, and Lara Keene, senior director of RKF here, represented Forever 21 in the deal.
The retailer wanted to upgrade its space and felt it could maintain its sales volume in a smaller store, Mr. Campagni said. The new shop, expected to open in about a year, is 43 percent smaller than Forever 21’s current space. The chain’s lease at 34 S. State expires next December.