Shops at LondonHouse seized: A turn of ownership in Chicago's retail scene

Downtown Chicago is witnessing an ownership change in its commercial real estate landscape. Starwood Property Trust has taken control of The Shops at LondonHouse retail space, located at the heart of the city on Michigan Avenue.

The two-story retail property at 360 N. Michigan Ave., previously held by a partnership between the Chicago-based Oxford Capital Group and the New York-based Angelo Gordon, has been transferred to Starwood. According to Crain’s Chicago Business, this transfer was accomplished through a deed-in-lieu of foreclosure, a step typically taken to avoid a more cumbersome foreclosure process.

When Oxford and Angelo Gordon embarked on a monumental project in 2013, they had envisioned the transformation of the historic London Guarantee & Accident Building into a luxurious hotel — the LondonHouse. After investing $126 million in the redevelopment, they sold the 452-room hotel in 2016 for a staggering $315 million, setting a record for the highest per-room price ever paid for a Chicago hotel.

Despite the sale, the duo retained ownership of the retail space. The Chicago hotel's success, as reported by The Real Deal, was unfortunately not mirrored by its retail counterpart, with the recent challenges leading to the ownership change.

Despite this turn of events, the Shops at LondonHouse kept 80% occupancy during the pandemic. However, recently two of their tenants, Corner Bakery and Mexican cafe La Borra del Café, faced financial difficulties which significantly affected the property's cash flow.

As the post-pandemic commercial landscape in Chicago continues to shift, the story of LondonHouse serves as a reminder that the question of how the pandemic and lockdown will reshape city centers remains largely unanswered.

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