Photo by Ryan Goodwin
The University of Chicago isn’t just one of the best of the universities in the world. The school is a major Chicago landlord, too.
An anchor in the Hyde Park neighborhood on the South Side of Chicago, UChicago’s main campus comprises 217 acres in Hyde Park and Woodlawn, and the university’s Booth School of Business also has a 50,000-square-foot outpost downtown in the Gleacher Center.
The university also owns and operates a host of student housing and residential buildings, including 323 off-campus apartments across nine buildings, and an abundance of commercial property.
For example, through its real estate affiliate Harper Court Holdings, the UChicago is the master tenant for the 261,000-square-foot Harper Court retail and office complex at 5235 S. Harper Court. And through its affiliate Lake Park Associates, the university is the landlord for the 163,000-square-foot Hyde Park Shopping Center at 5450 S. Lake Park Ave.
And as a landowner, the university’s tenants include 6040 JPT LLC, an entity of New York-based Jonathan Rose Cos., which acquired the 318-unit Jackson Park Terrace at 6054 S. Stony Island Ave. this year.
Through its entity, Jonathan Rose Cos. has a land lease with the university that runs until 2056, according to Nathan Taft, partner and senior managing director with Jonathan Rose Cos., which partnered with Boston-based Preservation of Affordable Housing Inc. POAH on the $25 million acquisition.
One of the university’s most recent real estate transactions occurred in May when it signed a letter of intent with the Lutheran School of Theology at Chicago and the McCormick Theological Seminary to purchase the buildings and underlying real estate of the respective schools located at 1100 E. 55th St. for academic use, according to Angelica Marks, associate vice president of real estate operations at the University of Chicago.
The property sits on 3.5 acres and has mixed-use educational facilities totaling 172,000 square feet, which includes open space and underground parking.
Marks talked to the Chicago Business Journal about how the university uses real estate to spur more economic development on the South Side. This interview has been edited for brevity and clarity.
The goal starting off was not that the university wanted to be a major landlord. It was not a goal to own so many square feet.
We began this work more than a decade ago in collaboration with many community stakeholders, and we continue to seek to leverage our role as long-term economic engine on the South Side and the city of Chicago to bring high-quality retail, services, amenities, jobs and economic opportunities to the South Side and Hyde Park generally.
Fast-forward to today, and the university is a landlord to 69 retail tenant spaces, leveraging our role as an economic anchor to attract and maintain a mix of local and national businesses. We work with many community partners to promote a vibrant commercial corridor, at the same time balancing our responsibilities as a landlord and a careful steward of university financial resources.
Harper Court was one of the initial projects the university worked on to improve retail businesses. Overall, we have a vacancy rate of 7%, and about 63% of businesses in our retail portfolio are locally owned businesses and we feel good about that. Harper Court has become a cornerstone of that approach.
The University of Chicago is a long-term economic anchor on the South Side, and we have worked with community stakeholders for more than a decade to attract new retail and amenities to 53rd Street.
The commercial real estate operations [CREO] team views our role as a collaborator and a facilitator to promote a vibrant commercial corridor, at the same time balancing our responsibilities as a landlord. CREO serves as a landlord to 69 retail tenants in Hyde Park with a particular focus on attracting and supporting local and diverse businesses. And we have leveraged many resources of the university to support commercial activity.
For example, we relocated hundreds of administrative staff members to office space on 53rd Street to help boost daytime population and open[ed] the Polsky Exchange on 53rd Street where it is a resource for both the university and local entrepreneurs.
The university does not currently have plans for major [commercial] acquisition this year. We evaluate opportunities as they arise considering community and university priorities, financial feasibility and long-term strategic value.
Covid-19 has been extremely difficult for retailers and small businesses, but we see clear signs of economic vitality in our community. Since the beginning of 2021, we have welcomed a dozen new businesses to Hyde Park including tenants opening their first South Side location, such as Small Cheval, Sweetgreen and Fairgrounds Coffee.
Our vacancy rate is around 7%, and sales per square foot across our portfolio have increased 25% since 2019. We are seeing strong demand for retail space in Hyde Park from a diverse mix of tenants, and we currently have negotiations in process for six new businesses.
Photo by Ryan Goodwin