Rt. 7 and I-355 | 62 Acres | Investment, Development
A 62-acre site was purchased in a short sale from a developer and a syndicated national bank group at a significant discount to cost (approximately 20%) and outstanding loan amount. Originally purchased around 2006, 90% of the infrastructure was completed to develop 500,000 SF of inline retail plus 13 outlots. Target Corporation, which purchased a site, opted to forgo construction of their store given the difficult economic environment. This decision caused a negative domino effect with Home Depot stopping negotiations as the second anchor, followed by other in-line stores and outlots pulling out of the market. The lending group began litigation as the borrower could not service the debt. Janko Group prior to acquisition appropriately valued the location, negotiated a 25 year STIF (sales tax incentive financing) with the City of Lockport, and assessed the complex legal and financial situation.
Since purchasing the development site, Janko Group has updated the infrastructure by $1 million per agreement with the city and hired two of Chicago’s top retail brokerage firms to market the property. Further, the firm has constructed a 10,700 SF building on one of the outlots, now 70% pre-leased, and is negotiating letters of intent for the remaining vacancies. Activity on vacant parcels remains high with negotiations underway with junior anchors and outlots. A Janko Group affiliated company acquired the adjacent 12-acre Target site in December 2016 at a discount to the Target land cost basis, and gives ownership total control of the OEA (Operation and Easement Agreement) on more than 70 acres.