FEATURE ARTICLE, JANUARY 2007

TIMING AND LOCATION RIGHT FOR THE ARBORETUM
New, 600,000-square-foot lifestyle center aims at an affluent growing population in Chicago’s northwest suburbs.
Randall Shearin

The Jaffe Companies is developing The Arboretum of South Barrington, a 600,000-square-foot lifestyle center in suburban Chicago.

A generation of developers has long made location the Number 1 criteria of any shopping center — and in a more leisurely time that was enough to guarantee success. Today, with shoppers’ time at a premium, that mandate has become even more demanding: “right location, right time, right project.”  One developer that understands this is The Jaffe Companies.

This spring, he Northbrook, Illinois-based company will break ground for a textbook example of the right project at the right time in the right location — The Arboretum of South Barrington. Scheduled to debut in summer 2008, this 600,000-square-foot lifestyle center in the northwest suburbs of Chicago will feature an open-air ensemble of upscale fashion apparel brands, home furnishings retailers, a luxury movie complex and destination restaurants — all within a half-mile of Chicagoland’s main thoroughfare, Interstate 90.

The Jaffe Companies became well versed in the demographics and geography of the northwestern Chicago suburbs after co-developing the highly successful lifestyle center Geneva Commons in partnership with Jeffrey R. Anderson Real Estate Inc.

Shortly after selling Geneva Commons to Morgan Stanley in 2005, The Jaffe Companies turned its attention to the 86-acre parcel in South Barrington that would become The Arboretum. The Jaffe Companies identified this parcel as ideally suited for a retail project unlike any other in the area: it was center stage along a dynamic corridor; situated in a highly affluent suburb of Chicago, and it would be the only location with quick and easy access to I-90 via a full cloverleaf exchange with Interstate 59. Perhaps most importantly, the zoning disputes and litigation that had plagued this intersection for years were resolved.

As with any major development, numerous compelling stories can be told about The Jaffe Companies’ prize project. But the driving theme here is, beyond all doubt, the site’s bulls-eye retail location and outstanding demographics.

More than 700,000 people, with an average annual household income of $92,931, live within 10 miles of The Arboretum, which is nestled on the northeast corner of the intersection of key Illinois Highways 59 and 72.

“In America’s third largest market,” says Michael Jaffe, president of The Jaffe Companies, “we will be opening in the best possible location at the best possible time.”

If best “location” is as obvious as a full I-90 exchange, best “time” is perhaps only immediately evident to those familiar with suburban Chicago. Jaffe has, in 24 years, brought major projects online in both Illinois and Texas. And in the northwest Chicagoland area he knows so well, Jaffe describes The Arboretum’s excellent timing in terms of commercial and residential development in progress.

For example, the mixed-use Prairie Stone Development, only 1 mile to the west of The Arboretum, is generating unprecedented activity in the area.

This development includes:

• Sears Holdings Corporation’s 4,000-employee headquarters.

• The recently opened Sears Center, an 11,000-seat multi-purpose arena and concert venue, will host dozens of the country’s top performers and events each year. The facility will also serve as home to semi-professional soccer, lacrosse and hockey teams. The Sears Center is expected to attract more than 750,000 visitors annually.

• A 14-story, 450-room resort hotel and water park, which is in the final planning stages.

• Illinois’ first Cabela’s hunting, fishing and camping store – totaling 200,000 square feet – expected to attract 4 million visitors per year.

Additionally, the 400,000-square-foot Target-anchored Poplar Creek Crossing power center shares the highly traveled intersection with The Arboretum. Poplar Creek Crossing offers a strong mix of national big box retailers including Linens ‘n Things and T.J. Maxx, as well as Chicago’s first Claim Jumper restaurant.

“In essence,” Jaffe notes, “affluent, quality-driven customers are here in abundance. But they lack ready access to the kind of shopping, dining and entertainment experiences that they most desire. We’re about to remedy that.”

The Tudor architectural style chosen for The Arboretum derives from The Jaffe Companies’ desire to convey timelessness and charm, as if the center has always been in this location, as well as evoking the historic ambience of Market Square in Lake Forest, the nation’s first integrated shopping center. The Jaffe Companies’ commitment to design is exemplified by the industry praise garnered for one of its visionary centers, Huebner Oaks in San Antonio, Texas.

“Retailers that communicate quality to the consumer will have success at The Arboretum,” Jaffe explains. “We have a commitment from a high-end movie theater that would be the first in the Chicago market and would be a magnet for well-to-do adults. Additionally, retailers new to the region — and even to the Midwest — have shown a strong commitment to this project.”

As testament to both the location of this center and The Jaffe Companies’ vision, nearly half of The Arboretum’s 125 storefronts and restaurants have already been committed. Financing for The Arboretum of South Barrington is being provided by the California Public Employees’ Retirement System (CalPERS), one of the largest pension funds in the country, whose advisor is RREEF America’s Chicago office.

When the story of The Arboretum is complete, it will be a highly visible example of commitment and vision. The commitment to bring a world class shopping, dining and entertainment destination to South Barrington — and the vision to remain steadfast in creating a landmark center in one of Chicagoland’s premier locations.

RETAIL CENTER BLOOMS IN DETROIT SUBURB Bloomfield Park is a mixed-use project in Bloomfield Hills, Michigan, that will feature 535,000 square feet of lifestyle retail space when complete in 2008. An expansive new mixed-use project is underway in Bloomfield Hills, a Michigan suburb just north of Detroit. A joint venture between Beachwood, Ohio-based Developers Diversified Realty (DDR), The Harbor Companies and Conventry Real Estate Advisors, Bloomfield Park broke ground in December with delivery scheduled for 2008. It is located on the northeast corner of South Telegraph Road and West Square Lake Road. The first phase of the development comprises 535,000 square feet of retail and entertainment space, a 67,000-square-foot office component and 60 for-sale condominium units. Bloomfield Park is designed as a park-like environment, with amenities including a lake, a public park with an ice-skating rink, public walkways and seating areas throughout the grounds. “The center will beautifully complement the area’s existing retail and provide a new downtown for Bloomfield Hills,” says Scott Schroeder, vice president of marketing and communications for DDR. The retail component will include a roster of lifestyle tenants, many of which have already signed on to occupy space within the development, a bookstore, a movie theater with stadium seating and a number of restaurant concepts. Among the retail tenants already committed to the project are Aeropostale, Ann Taylor Loft, Banana Republic, Bath & Body Works, BCBG, Chico’s, Coldwater Creek, H&M, J.Jill, Lucky Brand Jeans, Soma, Victoria’s Secret, and White House/Black Market. Some of the restaurant tenants include Bar Louie, Blue Point, Bravo! and Hyde Park. DDR is overseeing leasing, development and property management duties. The development team has enlisted RKF Retail Property Advisors to lease Bloomfield Park. The second phase of the project will include more office space, as well as additional retail space and residential units. — Kevin Jeselnik

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