A Chicago investor has taken over a struggling shopping mall in the residential suburb of South Barrington.
A company run by Rick Heidner purchased the defaulted $67 million loan on the South Barrington Arboretum, Crain reported. The transfer of the 480,000 square foot commercial property marks the end of a 2020 foreclosure lawsuit against the property’s previous owner, a Starwood Capital firm.
Heidner’s company foreclosed on the property by buying the debt from UnionBank, the lender that sued, in February. He got the mall title from Miami-based Starwood in an “out-of-court settlement.”
“The Arboretum will be our flagship property,” Heidner said in a statement regarding the deal. He also said the company is currently considering further developing the property.
Heidner owns two Hoffman Estates companies – Heidner Properties and video game company Gold Rush Gaming. He did not disclose what he paid for the Arboretum debt, which UnionBank put up for sale last October.
The mall ran into trouble during the pandemic, when several tenants, including Sur La Table, Loft and Gymboree, filed for bankruptcy.
Despite the recent recovery in the retail market, Starwood has lost control of several commercial properties. In April, a firm of M&J Wilkow and Bixby Bridge Capital purchased debt tied to the Promenade Bolingbrook shopping center and subsequently took possession of the property.
In October 2020, Starwood also lost the 1 million square foot Louis Joliet Mall in Joliet to its lender after it defaulted on a loan months earlier.
Arboretum tenants include Arhaus, Sephora, LL Bean and Xsport Fitness. Star Cinema Grill also took over the 38,000 square foot theater space that was previously occupied by the iPic.
[CCB] — Victoria Pruitt