Investment Details
  • Location Mt. Prospect, Illinois
  • Investment Type Equity 506(c)
  • Property Type Retail / Shopping Center
  • Distribution Schedule Quarterly
  • Targeted Hold 3 - 5 Years
  • Targeted IRR 14.00 - 17.00%
  • Targeted Cash on Cash 7.00 - 9.00%
  • Total Transaction Size $113,917,000
  • Minimum Investment $10,000

Randhurst Village Mt. Prospect, Illinois

 Confidential Private Placement Memorandum - August, 2015

 This property is no longer open for investment. In the future, shares may appear on the exchange.

Photos

Labeled Aerial Jewel-Osco Costco Bed Bath & Beyond TJ Maxx AMC Home Depot Aerial Close Sign Main Street PetSmart AMC Randhurst Village Randhurst Village Steak N Shake Sports Authority

About This Investment

Randhurst Village features beautiful shop- and restaurant-lined streets, dominant single-tenant and multi-tenant buildings, and a central Main Street corridor that provides access to all main anchors with second-floor office suites.

Why We Invested In This Deal

 

Trophy-Quality Asset

Randhurst is the Midwest's premier lifestyle center, integrating shopping, entertainment, and dining seamlessly into a single location.

Top Quality Operator

DLC is one of the nation’s preeminent owners, operators and managers of shopping centers. Their portfolio includes millions of square feet of attractive retail space and continues to expand.

Current In-place Cash Flow with Additional Value Add

Randhurst Village offers an attractive investment opportunity with the security of current in-place cash flow and ability to create additional value through the repositioning and development of additional retail square footage.

Dominant Tenant Base

Randhurst Village also boasts an impressive lineup of creditworthy national tenants. The majority of the property’s tenants are on long-term leases, providing a dynamic mix of goods, dining and service options that will remain a long-term focus for the affluent surrounding community.

Excellent Sales Volumes

Tenants at Randhurst Village generally produce outstanding sales volumes, some of which rank among their top locations in Greater Chicago. Many unique specialty retailers in the soft goods and restaurant categories also feature their only suburban location in the strong-performing center.

Prime Location

The surrounding trade area totals over two million square feet of retail space with high barriers to entry, mature communities and minimal large sites available for commercial development. Other major retailers along the corridor include Wal-Mart Supercenter, Menards, Target, Marshalls, LA Fitness and Ross stores.

Strong Surrounding Demographics

Traffic counts at Randhurst Village are strong with more than 70,000 vehicles passing the property each day. Over 93,000 individuals work within a five-mile radius of the property, and an additional 330,000 residents—with an average household income of $85,000—call the area home.

Offering Summary

Acquire Real Estate is pleased to offer an investment opportunity in Randhurst Village, located at the Northeast Corner of Rand Road (Route 12) and Elmhurst Road (Route 83) in Mount Prospect, Illinois (“Shopping Center” or “Property”). The Property was recently purchased by an investment syndicate sponsored by DLC Management Corp. (“Sponsor”)A leading Investment Advisor is the institutional equity partner in the deal. Acquire Randhurst LLC (the “Company”) owns 2.77% of the Membership Interests in the Sponsor’s investment syndicate.

Investment Entity  Acquire Randhurst LLC (the “Company”)
Investment Entity Manager  Acquire Advisory LLC (the “Manager”)
Offering Type  Equity
Offering Amount  $1,095,194
Ownership Interest in Sponsor Syndicate  2.77%

Acquire Real Estate Investor Projected Returns

Avg Cash on Cash (average annual cash on cash throughout investment period)  7.8%
IRR 15.0%
Equity Multiple 1.9

Executive Summary

Randhurst Village is a premier 1,009,616 square-foot grocery anchored lifestyle center located 20 miles northwest of Chicago in Mount Prospect, Illinois. Completely redeveloped in 2012, the shopping center serves as the primary retail and entertainment hub of the dense and affluent northwest Chicago trade area. The Class A center is presently 92% leased to a strong mix of creditworthy tenants and features an additional +/-50,000 square feet of potential new retail development and value-add potential.

Originally built as the first enclosed mall in Greater Chicago, Randhurst Village was completely redeveloped in 2012 into a trophy destination for retail, dining, entertainment and office. Today the center is home to 53 tenants including anchors Carson Pirie Scott (209,224 SF), Costco (151,479 SF), Home Depot (122,750 SF), Jewel-Osco (65,230 SF), AMC Theatres (47,991 SF), Sports Authority (40,665 SF), Bed Bath & Beyond (32,500 SF), TJ Maxx (26,129 SF), Petsmart (25,083 SF) and World Market (18,328 SF).

Tenants at Randhurst Village generally produce outstanding sales volumes, some of which rank among their top locations in suburban Chicago. More than 70,000 vehicles pass the center each day, and approximately 93,000 individuals work within a five-mile radius. The region is also home to over 330,000 residents with an average household income of $85,000. A separately owned 120-room Hampton Inn & Suites hotel, also located on-site, adds additional daily traffic to the center.

Reinvented from Chicago’s first enclosed regional mall into a premier shopping and entertainment center, Randhurst Village serves as the central retail hub for Chicago’s most affluent communities.

Property Snap Shot

Building Occupied SF Available SF Total SF
Anchors 596,674 0 596,674
Building A 31,264 6,262 37,526
Building B 0 3,436 3,436
Building C 31,128 7,590 38,718
Building D 2,807 2,888 5,695
Building E 43,865 1,881 45,746
Building F 3,134 0 3,134
Building G 14,948 14,609 29,557
Building H 5,400 20,439 25,839
Building L 6,877 0 6,877
Building M 6,824 0 6,824
Building P 43,411 0 43,411
Building T 64,642 1,749 66,391
Building U 9,084 0 9,084
Pads 25,602 0 25,602
EO Office Building 43,252 21,850 65,102
Total As-Is 928,912 80,704 1,009,616
Future Construction      
New Building N N/A 17,995 17,995
New Building Q N/A 32,000 32,000
New Pads N/A 13,500 13,500
Total Future N/A 63,495 63,495

Retail/Office Breakdown

Type Occupied SF Available SF Total SF
Retail 877,182 44,576 921,758
Office 51,730 36,128 87,858
Total 928,912 80,704 1,009,616

Occupancy Breakdown

Type Occupancy
Retail Occupancy 95.2%
Office Occupancy 58.9%
Total Occupancy 92.0%

Investor Returns

This calculator predicts your cash flow based on your initial investment and the targeted returns for the property. The output is based on an investment made on day one of the offering.

Returns
Total Proceeds
Total Profit
Average Cash On Cash
Internal Rate of Return
Equity Multiple
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* The return of capital fee is only processed once the investor receives a full return of initial capital, excluding operating distributions.

Property Description

Property Description

Randhurst Village contains 1,009,616 square feet of leasable area and is located on just over 100 acres of land. The center features 11 outparcels (two of which are multi-tenant buildings) and a four-story office building, all of which center around five in-line buildings. The property also offers three levels of above-grade structured parking.

Property Details

Property Name Randhurst Village
Property Type Grocery anchored lifestyle and entertainment center
Address 1 Randhurst Village Drive, Mount Prospect, IL 60056, United States
Year Built / Renovated 1962 / 2012
Total Gross Leasable Area 1,009,616 SF
Site Area 100.11 acres
Parking: Above Grade Parking Garage: 450 spaces
Surface Parking: 4,834 spaces
Total: 5,284 spaces (4.7/1,000 GLA)
Foundation Poured reinforced concrete/perimeter footings and column pads 
Roof Rubber membrane
HVAC Individual rooftop units
Utilities Electricity: Dominion
Natural Gas: Local Public Utility
Water: Municipal System
Sewer: Municipal System 
Fire Protection Sprinklers, detectors and alarm system, elevator recall 
Interior Walls Varies according to tenant
Floor Coverings Varies according to tenant
Ceiling Varies according to tenant

Site Plan

Code Type Tenant SF
Anchors      
100 Retail Carson Pirie Scott 209,224
200 Retail Costco 151,479
300 Retail Home Depot 122,750
400 Retail Jewel Osco 65,230
500 Retail AMC 47,991
Building A      
A101 Retail Old Navy 12,500
A102a Retail Maurice's 4,159
A102b Retail Carter's 4,802
A103 Retail Pigtails & Crewcuts 1,300
A107 Retail Famous Footware 5,000
A118 Retail Available (A118) 6,262
A125 Retail The Children's Place 3,503
Building B      
B101 Retail Available (B101) 3,436
Building C      
C101a Retail Available (C101a) 868
C101b Retail Available (C101b) 1,712
C103 Retail Charming Charlie 8,115
C104 Retail Available (C104) 2,651
C118 Retail Smokey Bones  6,558
C120 Retail Eggsperience 4,577
C124 Retail Papa Saverio's Pizzeria 3,400
C200 Office Human Synergistics 6,967
C222 Office Available (C222) 2,359
C234 Office State Farm Insurance 980
C246 Office Intrestco 531
Building D      
D101 Retail Available (D101) 2,888
D103 Retail Verizon Wireless 1,607
D104 Retail Subway 1,200
Building E      
E101 Retail Sports Authority 40,665
E101a Retail Orange Theory Fitness 3,200
E101b Retail Available (E101b) 1,881
Building F      
F101 Retail Truco Tacqueria 3,134
Building G      
G101 Retail E+O 6,316
G107 Retail Available (G107) 1,193
G109 Retail Available (G109) 1,497
G117 Retail BlackFinn American Grille 8,632
G200 Office Available (G200) 5,960
G220 Office Available (G220) 5,959
Building H      
H101 Retail Available (H101) 6,939
H102 Retail Available (H102) 9,000
H103 Retail Available (H103) 4,500
H105 Retail Phoenix Salon 5,400
Building L      
L01 Retail Pei Wei Asian Diner 3,025
L02 Retail Naf Naf Grill 2,373
L03 Retail Menchie's 1,479
Building M      
M1 Retail Panera Bread 4,000
M2 Retail GNC 1,100
M3 Retail Nothing Bundt Cakes 1,724
Building P      
P100 Retail PetSmart 25,083
P102 Retail Cost Plus World Market 18,328
Building T      
T100 Retail Bed Bath & Beyond 32,500
T101 Retail Massage Envy 3,613
T102 Retail TJ Maxx 26,129
T106 Retail Torrid 2,400
T107 Retail Available (T107) 1,749
Building U      
U101 Retail Chipotle 2,413
U200 Retail Jersey Mike's Subs 1,248
U300 Retail Sport Clips 1,020
U400 Retail T-Mobile 2,003
U500 Retail Five Guys Burgers 2,400
Pads      
Pad 1 Retail Bank of America 5,946
Pad 2 Retail Outback Steakhouse 5,998
Pad 3 Retail PNC Bank 3,710
Pad 4 Retail Steak N' Shake 3,748
Pad 5 Retail Buffalo Wild Wings 6,200
EO Office Building    
EO-100 Office JP Morgan Chase 13,247
EO-200 Office JP Morgan Chase 28,600
EO-310 Office Available (EO310) 5,459
EO-312 Office MP Historical 610
EO-410 Office Available (EO410) 4,135
EO-415 Office Available (EO415) 1,010
EO-420 Office Available (EO420) 3,741
EO-424 Office National Emblem 268
EO-425 Office Hunter Tax Service 527
EO-430 Office Available (EO430) 1,693
EO-450 Office Available (EO450) 2,389
EO-455 Office Available (EO455) 616
EO-460 Office Available (EO460) 2,807

Tenancy

Randhurst Village is a 92% leased lifestyle center anchored by strong performing anchor tenants such as Costco, Carson Pirie Scott, AMC Theatres, Home Depot and Jewel-Osco. The center features core quality tenant stability and sales performance; Home Depot reportedly generated one of the highest gross receipt per transaction within this chain and is a top performer in the Chicago market. Another dominant anchor, AMC Theatres, serves as an upscale, state-of-the-art movie theater with 12 screens of stadium seating. The Randhurst Village AMC Theater is the premier cinema destination for movie-goers in the northwest suburbs and ranks in the top 20% of sales for Chicago theater destinations. Carson’s (Bon-Ton Stores) is the original department store anchor to the Randhurst Mall dating back to 1962. The store recently underwent a $10 million renovation and lease extension, and generates consistently strong sales. The Jewel-Osco at Randhurst Village is the #1 market share grocery in Chicagoland and generates excellent sales on site. Finally, the Costco at Randhurst Village is its only location on Rand Road and serves the northwest suburbs north of I-90 and west of I-294, creating exceptional consumer draws to the site.

Other national credit tenants that serve as junior anchors for the center are Bed Bath & Beyond, TJ Maxx, PetSmart, Old Navy, World Market (Bed Bath & Beyond credit) and Sports Authority. Randhurst Village features strong drawing power with its ideal tenant mix and position as a destination-oriented retail, office, dining and entertainment venue. In addition to the anchors, Randhurst Village features a variety of national complementary retailers including Massage Envy, The Children’s Place, GNC, Famous Footwear, Maurices and Carter’s. Tenants positioned on single-tenant net leased ground leases include Bank of America, Carrabba’s (Bloomin Brands), PNC Bank and Buffalo Wild Wings. Randhurst Village also features several of the premier dining destinations in the northwest suburbs of Chicago including Blackfinn American Grille, Naf Naf Grill, Pei Wei Asian Diner, Eggsperience and Truco Tacqueria, along with fast casual favorites in Chipotle, Five Guys, Panera Bread, Steak N’ Shake and Subway.

Lease Expiration Chart

Major Tenant Profiles

AMC Theatres is an American movie theater chain owned and operated by AMC Entertainment, Inc., a subsidiary of Chinese conglomerate Dalian Wanda Group. Founded in 1920, AMC has the second-largest share of the American market, behind Regal Entertainment Group and ahead of Cinemark Theatres. The chain has 346 locations mostly in North America, along with 86 more locations in mainland China, home of its corporate parent.

 

Bank of America Corporation is one of the largest banks in the world serving over 57 million clients with 5,500 branches and 16,300 ATMs in more than 150 countries. The multinational company provides various banking and financial products and services to individual consumers, small-and middle-market businesses, institutional investors, corporations, and governments. Bank of America is the second-largest bank holding company in the United States with $2.18 trillion in assets as of June 30, 2014.

 

Bed Bath & Beyond Inc. and its subsidiaries is a chain of retail stores operating mainly under the name Bed Bath & Beyond, but also Christmas Tree Shops or andThat!, Harmon or Harmon Face Values, buybuy BABY, and World Market or Cost Plus World Market. The company sells a wide assortment of domestics merchandise and home furnishings, which include bed linens, bathroom items, kitchen textiles, food, giftware, health and beauty care items and infant and toddler merchandise. As of June 1, 2013, the company operated 1,478 stores (including 1,008 Bed Bath & Beyond stores) in all 50 states, the District of Columbia, Puerto Rico, and Canada.

 

Buffalo Wild Wings, Inc. is an established and growing owner, operator, and franchisor of restaurants featuring a variety of boldly flavored, made-to-order menu items including its Buffalo, New York-style chicken wings spun in any of its signature sauces. As of December 16, 2013, there are 975 Buffalo Wild Wings restaurants in the United States, Canada, and Mexico. The restaurants create an inviting neighborhood atmosphere that includes an extensive multi-media system, a full bar, and an open layout, which appeals to sports fans and families alike.

 

Carson Pirie Scott & Co., or Carson’s, is a chain of department stores that have been in business for over 150 years. Their product price points are targeted to the moderate-to-upscale shopper. The majority of the stores are located in the Chicago metropolitan area, with over 40 stores under the nameplate. Stores are also operated in parts of Indiana including northwest Indiana, Indianapolis, and Fort Wayne, along with Michigan Carson’s is a wholly owned subsidiary of the Bon-Ton Stores, Inc. The Bon-Ton Stores, Inc., with corporate headquarters in York, Pennsylvania and Milwaukee, Wisconsin, operates 272 department stores, which includes 10 furniture galleries, in 25 states in the Northeast, Midwest and upper Great Plains under the Bon-Ton, Bergner’s, Boston Store, Carson’s, Elder-Beerman, Herberger’s and Younkers nameplates. The stores offer a broad assortment of national and private brand fashion apparel and accessories for women, men and children, as well as cosmetics and home furnishings.

 

Chipotle Mexican Grill, Inc. develops and operates fast-casual, fresh Mexican food restaurants offering a focused menu of burritos, tacos, burrito bowls and salads made from fresh, high-quality raw ingredients, prepared using classic cooking methods and served in a distinctive atmosphere. The restaurant is known for its large burritos, assembly line production, and use of natural ingredients. The company has released a mission statement called “Food with Integrity”, which highlights its efforts in using organic ingredients, and serves more naturally raised meat than any other restaurant. Chipotle is one of the first chains of fast casual dining establishments. Chipotle is the No. 5 fast-casual chain in the U.S. by sales. As of October 15, 2013, the company operated approximately 1,500 restaurants. Chipotle Mexican Grill, Inc. was founded in 1993 and is based in Denver, Colorado.

 

 

 

Costco Wholesale Corporation (Costco) with its subsidiaries is engaged in the operation of membership warehouses in the United States and Puerto Rico, Canada, the United Kingdom, Mexico, Japan, Australia, and through majority owned subsidiaries in Taiwan and Korea. Costco buys the majority of its merchandise directly from manufacturers and route it to a cross-docking consolidation point (depot) or directly to its warehouses. Costco currently operates 658 warehouses, including 465 in the United States and Puerto Rico, 87 in Canada, 33 in Mexico, 25 in the United Kingdom, 20 in Japan, 11 in Korea, 10 in Taiwan, six in Australia and one in Spain. The Company plans to open up to an additional five new warehouses prior to the end of its fiscal year on August 31, 2014. Costco also operates electronic commerce web sites in the U.S., Canada, the United Kingdom and Mexico.

 

Brown Shoe Company, Inc. is a global footwear company that inspires people to look and feel good every day, with a compelling portfolio of loved and trusted brands. The company puts more than 100 million pairs of shoes on the feet of women, men, and kids around the world each year through partnerships with department stores, national chains, and independent retailers on behalf of its footwear brands, as well as its own retail stores, catalogs, and e-commerce sites. Famous Footwear is one of America’s leading family branded footwear retailers selling value-priced footwear for the entire family, based on the number of stores it operates and sales volume compiled by the company from published information of its direct competitors. As of July 31, 2013, it operated approximately 1,300 retail shoe stores in the United States, Canada, China, and Guam.

 

Five Guys is a fast-growing hamburger chain, founded in 1986 by Janie and Jerry Murrell and their four sons. Since first selling franchise rights in 2003, the restaurant chain has exploded to over 900 locations in over 46 states and 6 Canadian provinces with over 1,500 units currently in development. Five Guys’ trademark hamburgers and French fries have been voted #1 in a multitude of polls nation-wide over the past decade, including being named Washingtonian Magazine’s “Reader’s Choice” number 1 burger every year since 1999. The restaurant chain has been Zagat rated since 2001. Five Guys prides itself on only using fresh ground beef and pure peanut oil with no trans fats. The store’s simple menu is centered on hamburgers and fries, but other items such as hot dogs and grilled cheese are also available.

 

The Home Depot Inc., together with its subsidiaries, operates as a home improvement retailer. The Home Depot, Inc. is the world’s largest home improvement specialty retailer and the sixth largest retailer in the United States. The company’s stores sell a range of building materials, home improvement products, and lawn and garden products to do-it-yourself (D-I-Y), do-it-for-me (D-I-F-M), and professional customers. It also offers installation services to D-I-F-M customers. These installation programs include products, such as carpeting, flooring, cabinets, countertops, and water heaters. In addition, the company engages in the professional installation of various products, such as generators, and furnace and central air systems that are sold through its in-home sales programs. As of February 25, 2014, it operated 2,263 retail stores in 50 states of the United States, the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam, 10 Canadian provinces, and Mexico.

 

Jewel-Osco is a supermarket chain headquartered in Itasca, Illinois, a Chicago suburb. Jewel-Osco has 176 stores across northern, central, and western Illinois; eastern Iowa; and portions of northwest Indiana. Jewel-Osco and Jewel are currently wholly owned subsidiaries of Boise, Idaho-based Albertsons. Albertsons itself is a subsidiary of Cerberus Capital Management. Albertsons currently has signed a merger agreement with Safeway, the nation’s second largest supermarket chain, and is awaiting final approval by the Federal Trade Commission. Cerberus will continue to be the parent of the combined entity.

 

Old Navy, a division of Gap Inc., is a nationwide clothing retailer with over 1,000 locations in the United States. Old Navy offers broad selections of apparel, shoes, and accessories for adults, children, and babies, as well as other items, including a maternity line, consumables, and personal care products.Gap Inc. is a leading global specialty retailer offering clothing, accessories, and personal care products for men, women, children, and babies under the Gap, Banana Republic, Old Navy, Piperlime, and Athleta brands. The company’s products are available for purchase in over 90 countries worldwide through approximately 3,100 company-operated stores, 175 franchise stores, and e-commerce sites.

 

PetSmart, Inc. is North America’s leading specialty pet retailer of products, services and solutions for the lifetime needs of pets based on net sales. The company operates more than 1,278 stores in the United States and Canada, providing a broad range of competitively priced pet foods and pet products, as well as services including pet training, grooming, boarding, day camp, and pet adoption services. All PetSmart stores offer complete pet training services and virtually all stores feature pet styling salons that provide high-quality grooming services, while approximately 196 stores offer boarding through PetSmart PetsHotels.

 

The Sports Authority, Inc. (“Sports Authority”) is headquartered in Englewood, Colorado and was founded in 1987. The company operates over 470 stores in 45 U.S. states under The Sports Authority banner as well as approximately 10 smaller-format stores under the SA Elite name, which focus on high-end sports apparel and accessories. Sports Authority sells different brands of sporting goods from many different vendors. Many of these products are made by other manufacturers and branded with the Sports Authority private labels. The company is privately owned by Leonard Green & Partners.

 

The TJX Companies, Inc. is the leading off-price retailer of apparel and home fashions in the U.S. and worldwide. The company is differentiated from traditional retailers by its opportunistic buying of quality, fashionable, brand name merchandise, which permits it to buy into current trends and pricing. The company operates multiple off-price retail chains, including (as of February 1, 2-014) 1,079 TJ Maxx, 942 Marshalls, 450 HomeGoods, and 4 Sierra Trading Post stores in the United States; 227 Winners, 91 HomeSense and 27 Marshall stores in Canada; and 371 TK Maxx and 28 Homespace stories in Europe. Although the company’s stores primarily target the middle to upper middle income customer, the company reaches a broad range of customers across many demographic groups and income levels with the values it offers.

 

Cost Plus World Market is a chain of specialty/import retail stores, selling home furniture, decor, curtains, rugs, gifts, apparel, coffee, wine, craft beer, as well as several international food products. Its current headquarters are located in Oakland, California, in the Jack London District. The company has been a subsidiary of Bed Bath & Beyond since being acquired in 2012. As of June 1, 2013, the Bed Bath and Beyond operated 1,478 stores (including 1,008 Bed Bath & Beyond stores) in all 50 states, the District of Columbia, Puerto Rico, and Canada.

 

Investment

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Financials

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Market

Location Overview

Randhurst Village is situated 20 miles from downtown Chicago and 10 miles from O’Hare International Airport—the third-busiest airport in the United States. The center is easily accessible via Interstate 294, four miles to the east, and Interstate 90, six miles to the south.

With over 70,000 passing vehicles each day, the center is a natural destination for residents located west of Interstate 294 and north of Interstate 90, including those in Mount Prospect, Des Plaines, Prospect Heights and Arlington Heights.

Nearly 330,000 people live within a five-mile radius of the property, with an average household income of $85,000.  Within a seven-mile radius are approximately 562,800 residents and 219,600 households with an average household income of more than $90,800. The surrounding area ranks among the wealthiest regions in the state.

Reflecting the strength of the trade area and surrounding demographics, the JP Morgan Chase branch at Randhurst reported total deposits of more than $900 million as of June 30, 2014. This is JP Morgan’s third-largest branch by deposits in the entire state of Illinois, and the 20th largest bank branch by deposits out of nearly 4,700 branches in the state.

More than 95,000 people work within a three-mile radius of the center, adding significant daytime customer traffic. Major employers in the trade area include CVS Caremark Rx, Bosch Tools, Cummins-Allison, MetLife, Sumitomo Electric, Siemens and Comcast.  Kensington Business Center, a 300-acre business park home to 3.25 million square feet, is less than a five-minute drive from the property.

The Village of Mount Prospect, Illinois

The Village of Mount Prospect is a dense, established suburban community with a 2010 population of 54,167. Over 95,000 people work within a three-mile radius of the downtown and are employed in over 5,300 businesses. The village is home to award-winning schools, a charming suburban downtown district, and exceptionally strong retail, office and light industrial development. Incorporated in 1917, Mount Prospect is perhaps best known as the site of the former Randhurst Mall, which at the time of its development in 1962 was the Chicago area’s first enclosed mall and the largest enclosed air-conditioned space in the U.S. The mall underwent a large-scale redevelopment into the subject property in 2012. The Kensington Business Center, located just north of Mount Prospect Plaza, is a prestigious business park comprising 3.25 million square feet over 300 acres with lakes, jogging trails and picnic areas. The business park is home to numerous office and medical tenants, such as Caremark, MetLife, AT&T and Cummins Allison, all drawn by the area’s many amenities and proximity to O’Hare International Airport. 

Demographic Data

Population 1-Mile 3-Mile 5-Mile 7-Mile
2013 Total Population 12,377 116,999 328,937 562,831
Forcasted 2018 Population 12,678 119,839 336,938 576,628
% Change 2013-2018 2.43% 2.43% 2.43% 2.45%
Housing 1-Mile 3-Mile 5-Mile 7-Mile
2013 Households 4,833 45,956 130,194 219,641
Forcasted 2018 Hoseholds 4,962 47,185 133,690 225,605
% Change 2013-2018 2.67% 2.67% 2.69% 2.72%
2013 Housing Units 4,948 47,125 135,156 228,044
2013 Daytime Demographics 9,092 93,736 294,717 598,653
Income 1-Mile 3-Mile 5-Mile 7-Mile
2013 Household Income: Median $82,297 $91,462 $85,005 $90,830
2013 Household Income: Average $66,476 $76,052 $71,293 $74,912
2013 Per Capita Income $32,171 $35,984 $33,705 $35,507
2013 Median Age 44.4 42.2 41.1 41.1

Market Overview

The Chicago metropolitan retail market is the third-largest retail real estate market in the United States and contains approximately 141.5 million square feet of retail space (excluding enclosed regional shopping centers). According to a Q1 2015 Chicago Retail report by Los-Angeles based CB Richard Ellis, consumer confidence continued to rise in the Chicago retail market and the local retail vacancy rate leveled off. Vacancy in the Chicago area was 9.6 percent in Q1 2015, up from 9.5 percent in the last three months of 2014 but well below the 10.4 percent of Q1 2014.

Due to strengthening grocery-driven trends, shopping center development will continue to hover around 2 million square feet per year according to Mid-America Real Estate Corporation (Chicagoland 2015 Shopping Center Report). While there was a 6% increase in shopping center development from 2.26 million square feet in 2013 to 2.40 million square feet in 2014, the 2015 Report anticipates a 14% decrease with approximately 2.06 million square feet planned for the coming year. While new development has grown significantly since 2011, new development between 2.00 and 2.50 million square feet per year appears to be the growing trend in Chicagoland.

As in previous years, grocery-anchored projects continue to drive development activity in this region. Twelve of the 15 developed centers in 2014 were grocery-anchored, while 9 of the 11 planned centers in 2015 are set to be grocery-anchored.

The majority of new development also continues to be focused in the Chicago suburbs, as the continued market recovery fuels new development to meet retailer growth requirements. Nine of the 15 centers developed in 2014 were in the suburbs, and nine of the expected 11 centers developed in 2015 will also be in the Chicago suburbs.

Major tenants expanding within the Chicago MSA in the last 12 months include: Wal-Mart and Target supercenters, and fitness users LA Fitness, Xsport and Planet Fitness. The TJ Maxx companies, Ross, Nordstrom Rack, Michaels, The Sports Authority, Binny’s Beverage Depot, Burlington Coat Factory, Ulta, Pier 1, Petco and Pet Supplies Plus all continue to expand with focus on the urban trade areas and continued in-fill in well-established suburban trade regions. The restaurant category is more active than ever for both full-service and QSR concepts all competing for limited outlot opportunities in markets with established residential bases and strong daytime densities.

While no new traditional malls have opened in recent years in the Chicago area, many of the existing regional malls are in various stages of planning and/or implementation of redevelopment. Several malls have added a “lifestyle” component to enhance the existing tenant mix with high-end restaurants, bookstores, entertainment venues and soft goods retailers. Randhurst Mall was the latest to undergo this transformation in 2012. The revitalization entailed a complete redevelopment to include lifestyle center components along with an entertainment component of theater and restaurants. Such redevelopments of traditional regional malls are driven by today’s convenience-oriented consumer.

According to the National Retail Federation (NRF), consumer optimism is currently at its highest level since 2004 as Americans exhibit more optimism about current and future conditions. While concerns surfaced toward the end of 2014, consumer spending remained strong throughout the last quarter of 2014. Investment activity in the national retail real estate sector was also up 20 percent year-over-year in (according to Real Capital Analytics), which also anticipates additional increases in retail real estate income. 

Competitive Analysis

Randhurst Village is strategically situated at a high-traffic intersection along the Rand Road corridor within the Mount Prospect sub-regional retail trade area. The property’s competitive trade area primarily consists of power centers and community shopping centers with national anchor tenants, stand-alone big box retailers and several smaller convenience centers. The overall primary competitive set totals approximately 2.1 million square feet and currently has an overall occupancy rate of 92%.

Primary Competition

Primary competitors to Randhurst Village are anchored community shopping centers located along Rand Road. Mount Prospect Plaza, located at the northeast corner of Rand and Central Road, is currently 86% occupied, includes over 300,000 of GLA and features LA Fitness, Marshalls, Ross Dress for Less, Petco, and Walgreens. Randhurst Commons, located at the southwest corner of Rand Road and Kensington Road, contains an Office Max and Fresh Thyme with one available box space that formerly housed LA Fitness.

Primary competition continues about a mile south of the subject property with a Wal-Mart Supercenter. Redeveloped in 2011, this property draws significant traffic to the Rand Road and Central Road intersection. To the north of Wal-Mart is a freestanding Brunswick Zone bowling alley, followed by a freestanding Menard’s (160,000 square feet). The recent decision of Wal-Mart and Menard’s to expand their stores in these locations emphasize the large consumer demand in this trade area. 

Primary Competition Inventory

Name Location Year Built / Renovated Total GLA (Sq Ft)  Occupancy Level  Asking Net Rental Rate  Major Tenants
Subject Property          
Randhurst Village SEC Elmhurst Rd (IL Rte 83) & Euclid Ave Original Mall: 1962
Redevelopment: 2011
1,009,616 92% $20.00 - $40.00  Costco (151,479 SF)
Carson Pirie Scott (209,224 SF)
AMC Randhurst 12 (47,991 SF)
Sports Authority (40,665 SF)
Bed Bath & Beyond (32,500 SF)
TJ Maxx (26,129 SF)
Home Depot (122,750 SF)
Jewel-Osco (65,230 SF)
PetSmart (25,083 SF) 
Primary Competition              
Mt. Prospect Plaza  NEC Rand Rd & Central Rd, Mt. Prospect, IL 1958 - 1987 300,745 86% $18.00 - $26.00  LA Fitness (37,600 SF)
Marshalls (35,000 SF)
Ross (24,170 SF)
Aldi (22,108 SF)
Petco (15,000 SF)
Walgreens (office) (72,879 SF)
Freestanding Walmart Supercenter  N of NEC Rand Rd & Central Rd
Mt. Prospect, IL
1991
(Expanded 2009)
122,609 100% N/A Walmart Supercenter
Freestanding Menards  SEC Rand Rd & E Business Center Dr Mt. Prospect, IL 2002
(Expanded 2014)
160,000 100% N/A Menards
Sunrise Plaza  NWC Central Rd & Rand Rd
Mt. Prospect, IL
2002 13,275 100% $29.50 Pizza Hut
Hertz
H&R Block
TitleMax
AAA
Freestanding Walgreens  SWC Rand Rd & Central Rd
Mt. Prospect, IL
1990 13,975 100% N/A Walgreens (13,975 SF)
Randhurst Crossing  SWC Rand Rd & Elmhurst Rd (IL Rte 83)  Mt. Prospect, IL 2001 17,700 66% N/A Starbucks
FedEx Office
ATI Physical Therapy
Randhurst Commons  S side of Rand Rd. W of Elmhurst Rd (IL Rte 83) Mt. Prospect, IL 1977 107,074 72% $11.00 - $15.00 OfficeMax (23,500 SF)
Fresh Thyme (43,788 SF)
Prospect Crossing  SEC Rand Rd & Willow Rd
Prospect Heights, IL 
1977-1996 176,400 92% $12.00- $18.00  Ultra Foods (87,000 SF)
Women's Workout World
Sherwin-Williams
Freestanding Target  SEC Rand Rd & Willow Rd
Arlington Heights, IL
1998 133,332 100% N/A Target (133,332 SF)
Primary Competition Totals     1,045,110 91.26%    

Theater Competition

Randhurst AMC is a state-of-the-art movie theatre featuring 12 screens (including one IMAX screen), a full bar and reclining seats, making it the premier cinema destination for movie-goers in Chicago’s northwest suburbs. The subject AMC Theater has been successful since inception and based on ticket sales alone, ranks fifth among its competitors. Overall Randhurst AMC sales are about $6,100,000 for the trailing 12 months, or $508,500 per screen, which ranks in the top 20% of sales for Chicago theater destinations.

Theater Inventory

Theatre Name  Location  Distance from Subject  # of Screens  Total Ticket Sales  Total Ticket Sales per Screen 
Randhurst 12  Mount Prospect, IL  N/A  12 $5,021,532 $418,461
BIG Cinemas Golf Glen Stadium 5  Niles, IL  5.6 Miles  5 $1,178,535 $235,707
Showplace 12 Niles  Niles, IL  7 Miles  12 $3,402,614 $283,551
Glen Stadium 10  Glenview, IL  7.5 Miles  10 $2,574,231 $257,423
Streets of Woodfield 20  Schaumburg, IL  8 Miles  20 $5,774,644 $288,732
Elk Grove Theatre  Elk Grove Village, IL  8.8 Miles  6 $1,974,865 $329,144
Carmike Muvico Rosemont 18  Rosemont, IL  9.4 Miles  18 $7,589,600 $421,644
Deer Park 16  Deer Park, IL  10.5 Miles  16 $3,586,250 $224,141
Gardens 13  Skokie, IL  11.4 Miles  13 $2,584,780 $198,829
Northbrook Court 14  Northbrook, IL  11.5 Miles  14 $3,985,570 $284,684
Village Crossing 18  Skokie, IL  12.1 Miles  18 $9,854,721 $547,485
Showplace 8 Vernon Hills  Vernon Hills, IL  12.1 Miles  8 $2,242,973 $280,372
Evanston 18  Evanston, IL  14 Miles  18 $7,226,976 $401,499
Theatre Inventory Averages [1]       $4,331,313 $312,768

[1] Excludes Subject Property

Management

DLC Management Corp.

DLC Management Corporation is one of the nation’s preeminent private retail real estate companies, with expertise in acquisitions, new developments, redevelopments, leasing, property management, and asset management. Founded in 1991, the company specializes in using its human capital and expertise to enhance the value of retail real estate. DLC maintains strong relationships across leading value and necessity based retailers, as well as with premier private equity groups and institutional investment management firms. DLC is headquartered in Tarrytown, NY and has full-service leasing and property management offices in Atlanta, Chicago, and the Washington, DC area.


Location

Documents

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Forum

I want to confirm the the institutional partner equity is preferred over the Acquire equity. In the final sale or refinance, the institutional equity is returned first, then the Acquire equity is second?

Victor Perez Commented on 4/22/2016 1:40 PM
All equity is treated equally.

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