Harbert buys Village Crossing, a 722,466-square-foot Chicago power center

Harbert Management Corp. has acquired Village Crossing, a 722,466-square-foot grocery-anchored power center in the Chicago MSA at Skokie and Niles, with Fairbourne Properties as joint venture partner and continuing property manager. The announcement carries no price, no cap rate and no named seller.

What Harbert is buying is frequency rather than occasion: the release calls Village Crossing the dominant retail destination for a dense and affluent trade area just north of Chicago and credits it with roughly 6.8 million visits a year. Jewel-Osco, Best Buy, Dick's Sporting Goods, AMC Theatres, Barnes & Noble, PetSmart, Ulta and Michaels make up the anchor roster, and several of those anchors have signed long-term renewals and put material capital into their own spaces — the shape of retail that tends to hold rent when discretionary spending tightens. AMC's pull is doing underwriting work elsewhere in this publication's coverage, where a Class A apartment project is betting its lease-up on an AMC, Dave & Buster's and Hyatt House already drawing crowds.

The business plan Harbert describes is a leasing story wrapped around a capital budget: fill the vacancy with small-shop retailers and restaurants favored by the surrounding community, then modernize the facade, roofs, architectural features, lighting, wayfinding, tenant signage, landscaping and sidewalks. Todd Jordan, managing director of U.S. real estate at HMC, framed the purchase as a bet on retail centers that anchor their trade area and carry value-creation potential.

The anchors have already recommitted, and their money is in the ground. The incremental return has to come from the small-shop vacancy and the rents those new tenants sign, which makes the redevelopment budget and the leasing effort more load-bearing than the tenant roster in the press release. A center drawing 6.8 million visits has the traffic to justify the spend; whether small-shop demand in that trade area is deep enough to fill the space at the rents the plan assumes is the question the underwriting turns on, and the answer will surface in leased occupancy long before it surfaces in a valuation.

Harbert's structure makes the trade legible: the firm supplies equity, Fairbourne keeps running the asset, and Harbert gets a single large retail position without standing up a leasing and property-management bench for one center. That split is what lets a trade like this be underwritten on the operations rather than on the sponsor's own operating capability — and it is why the seller-side team keeping the keys is rarely a concession in deals of this size. How fast the small shops lease, and at what rent, is the trade from here.