Global investment company to buy Calhoun Square

FYI: About BlackRock

BlackRock is an investment management, risk management and advisory services company that employs more than 5,000 people and serves clients in more than 60 countries around the globe. Black Rock’s assets under management total more than $1 trillion. (Source: www.blackrock.com)

BlackRock, a New York-based investment company, is in the process of purchasing Calhoun Square and plans to close on the property in early June, said Greg Karlen, managing director of BlackRock Realty.

Karlen said he couldn’t disclose BlackRock’s bid for the Uptown shopping center because the sale was not final. A formal announcement will be made when – and if – the deal is completed, he said. He said BlackRock is in a "due diligence" stage of the purchase process, which involves reviewing contracts and other details.

No formal asking price was set for Calhoun Square, but real estate sources have speculated it was around $50 million. Current owner Principal Global Investors paid more than $28 million for Calhoun Square in 2004 and spent millions of additional dollars acquiring nearby properties.

Principal officials could not be reached for comment.

Karlen is the former president of Calhoun Square’s property management company, Madison Marquette, and said he knows the property well. So when Principal put the mall on the market in March, he advised BlackRock to acquire it.

"I believe it’s a great property with a lot of potential," said Karlen, who moved from Madison Marquette to BlackRock about a year ago.

Local developers and real estate professionals have had a hard time making financial sense of a Calhoun Square purchase, largely because of the mall’s city-approved $75 million redevelopment plan which includes a large condominium development. A stagnant condo market put the project on hold and eventually led to Calhoun Square’s sale.

Some retail businesses have also struggled in the area in recently, particularly in Calhoun Square, where vacancies abound.

BlackRock’s first priority for Calhoun Square if the sale is finalized is to get the retail portion back in shape, Karlen said. The company would then revisit residential options.

Karlen couldn’t talk about development specifics but said BlackRock plans to discuss options with city officials and staff and get back in front of neighborhood groups and other stakeholders. BlackRock also wants to partner with local development teams, Karlen said. He could not comment on whether the company plans to retain current Calhoun Square developer Solomon Real Estate Group.

City Council Member Ralph Remington (10th Ward) planned to meet with BlackRock staff early this month. Though some business owners and area residents have attributed Calhoun Square’s problems to its lack of local ownership, Remington said he’s not convinced that global companies can’t create a successful development.

"We always like to be able to deal with local companies," he said. "But, that being said, I think the jury is still out on what global companies can do. Everybody is approaching this sale with open minds and open arms."

Jeff Herman, president of Southwest commercial real estate company Urban Anthology, said BlackRock has the money, skill and resources needed to revitalize Uptown’s shopping center. And because of Karlen’s experience with Madison Marquette, BlackRock is "as intimate with the project as anyone out there," Herman said.

"I think we’re in for a fabulous partnership and a fabulous development," he said.

Local developer Stu Ackerberg, whose company The Ackerberg Group submitted a bid for Calhoun Square this year and in 2004, said he wasn’t surprised that a larger company came out on top again.

"My concern was there’d be an institution out there with lots of money that would bid, and they did," he said. "But, really, it’s just important to get the process moving and get that building back in shape."

Reach Jake Weyer at 436-4367 or [email protected].