Rhino Investments Group has secured $72.3 million in financing for its acquisition of the 929,899-square-foot open-air shopping centre Randhurst Village outside Chicago. This news was first reported by Commercial Observer. Rhino acquired the property on 23 September for $95 million from DLC Management Corp., with The Real Deal initially reporting the sale.
Aquarian Real Estate Partners (AREP) and 3650 Capital provided the acquisition financing. The structure included a $45.6 million senior loan from AREP and a $26.7 million mezzanine loan from 3650 Capital. Rhino plans to pursue a value-add strategy with this debt capital, which includes leasing vacant space and selling outparcel land, according to a press release.
Strategic Financing and Market Analysis
Anthony Longo of Alpha Capital CRE arranged the financing, while Conor Lalor, Keely Polczynski and Brian Schneiderman of Newmark represented DLC Management in the sale. Jonathan Roth, co-founder and managing partner of 3650 Capital, described Randhurst Village in a statement as 'a dominant retail property with a strong national tenant base'. He also noted that the property benefits from high footfall and offers significant 'value-add potential' as an investment due to its affluent suburban location in the greater Chicago area.
Roth added that the existing trusting relationship with the Rhino team is reflected in the high confidence in their business plan. He expressed delight in realising the financing together with AREP. Kevin Holmes, partner and head of AREP, described Randhurst Village as 'an ideally located property in a strong Chicago submarket'.
History and Current Appeal of the Location
Randhurst Village is located at 1 Randhurst Village Drive in Mount Prospect, a suburb 20 miles west of downtown Chicago and four miles from O’Hare International Airport. It originally opened in 1962 and was considered a revolutionary retail property: it was both the first enclosed shopping centre in the Chicago area and the largest enclosed, air-conditioned retail space in the United States.
Initially, the centre was owned by Randhurst Corporation, a joint venture of the now-defunct retailers Carson Pirie Scott, Wieboldt's and Montgomery Ward. DLC Management acquired the property in 2015 for approximately $100 million, which was the company’s largest single-asset acquisition at the time. The property was redeveloped into an open-air shopping centre over several years and attracts 9.3 million visitors annually, according to Placer.ai.
- —Costco
- —Home Depot
- —Jewel-Osco
- —T.J. Maxx
- —HomeGoods
- —Macy’s
- —AMC movie theater
- —PetSmart
- —DSW
- —Old Navy
- —Planet Fitness
Sanjiv Chopra, CEO of Rhino, stated that Randhurst Village is a 'generational retail asset' that is significantly undervalued relative to its market position, visitor profile and earnings potential.
