The University of Chicago has listed the 12-story Harper Court complex for sale and said it plans to lease back all of the office and retail space when it finds a buyer.
Harper Court opened in November 2013, after a multi-year redevelopment project designed to bring new amenities to Hyde Park and create economic opportunities for the surrounding area. The University first announced plans to sell the property shortly after it purchased it from the developer, CJUF III Harper Court LLC, in November.
“This project is the result of many years of planning and input from members of the community about the kinds of retail they wanted to see in the neighborhood, and we are looking for a new owner that will be committed to Harper Court for the long-term,” said James Hennessy, Associate Vice President for Commercial Real Estate Operations for the University.
Harper Court includes 224,000 square feet of office, retail and parking space. As part of a purchase deal, the University would sign a 20-year master lease for the office and retail portion and would continue to work with its leasing agent to identify retail tenants for the remaining spaces in the building. Harper Court is currently 93.6% leased.
The University exercised an option to purchase the project from the developer for $98 million, with the intention of maintaining goals set for the project through its partnership with the city and local community. Harper Court grew out of community visioning workshops held in 2008 that led the University of Chicago and the City of Chicago to contribute land and other resources to redevelop a former shopping center. The University committed to a 20-year lease of the office tower to help attract developers to bid on the project during the height of the global financial crisis, which made financing large real estate projects nearly impossible. Late last year, UChicago relocated about 550 employees to the building.
To date, the University has invested more than $30 million in Harper Court, including acquiring land for redevelopment and building out the office space. It also provided a $21.5 million loan guarantee for construction of the new Hyatt Place hotel, which is adjacent to the office tower and was part of the phase one construction for Harper Court. The Hyatt Place is owned by Smart Hotels and is not up for sale.
Harper Court is part of a larger effort led by the University to redevelop the 53rd Street commercial corridor. The University has made significant investments to renovate a number of other buildings on 53rd Street since 2011, helping to attract 23 new businesses to Hyde Park.
“From the beginning, Harper Court helped boost interest from prospective tenants and is now providing increased foot traffic to support the surrounding businesses,” Hennessy said. “We’re confident that it will be a good investment for the right buyer and continue to be an important center for the community.”
As current owner of the project, the University pays property taxes that contribute to the 53rd Street TIF district. It will continue to contribute to tax revenues as anchor tenant after the building is sold.
Harper Court is listed for sale with commercial real estate firm CBRE Group.