Reinsdorf-Judelson Venture Selling Block of Units in Barrington

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Reinsdorf-Judelson venture selling block of units in Barrington


By David Lee Matthews October 31, 2013

An investment firm launched by Jerry Reinsdorf and investor Robert Judelson is looking to accelerate the pace of profits from a busted condo deal, putting up for sale 47 unsold units in a development in Barrington.

Northbrook-based Michigan Avenue Real Estate Investors is asking $8.5 million for 23 unsold town homes and 24 unsold condos at the Arbors of Barrington in the affluent northwest suburb, according to marketing materials from listing broker ACO Commercial.

Mr. Judelson, also a co-founder of Chicago-based real estate investment giant JMB Realty Corp., declined to comment.

In 2006, a venture managed by commercial real estate executive Douglas Cameron began a condominium conversion of the 110-unit complex. But the venture defaulted on a nearly $19 million loan used to finance the acquisition of the 12-building property. Mr. Cameron said, “Our timing was a little late in the game, otherwise it was fine.”

A Michigan Avenue venture paid about $12.1 million in a 2008 foreclosure sale for a majority of units in the complex, 560 Russell St., although the exact number of homes could not be determined. The venture financed the acquisition with a $10.4 million from Lake Forest Bank & Trust Co.

While continuing to market the condo conversion, Michigan Avenue has leased out the unsold units, said George Toscas, an executive vice-president with Chicago-based ACO.

Michigan Avenue has sold five units this year, at prices ranging from $110,000 and $217,500, Cook County property records show.

About 95 percent of the remaining 47 units are leased with 60-day “kickout” clauses that require the tenant to surrender the unit in the event of a sale, according to ACO marketing materials. The asking price is nearly $181,000 per unit.

“They’re able to take a fair discount for the privilege of exiting the investment in full,” Mr. Toscas said.

With 22 different floor plans ranging from studio apartments to multi-level town homes, the Arbors project has an eclectic mix of units with no “cookie-cutter” feel, Mr. Toscas said. Located in the coveted Hough Street Elementary School district, the complex is a destination for young families seeking relatively affordable living quarters in the posh suburb.

“It’s a great entry level to get into the Village of Barrington,” said broker John Morrison of RE/Max of Barrington, who has represented several clients who purchased units in the Arbors.

Mr. Judelson left JMB to join Mr. Reinsdorf, owner of the Chicago White Sox and the Chicago Bulls, in starting real estate syndication company Balcor Co. in 1973. The company was sold for about $100 million to American Express Co. in 1982.