Properties sold off in Qualteq bankruptcy
Properties sold off in Qualteq bankruptcy
By: Abraham Tekippe | March 27, 2013
Credit: Chicagorealestatedaily powered by Crain’s Chicago Business
The winning bidders for the former home of Michael Jordan’s Restaurant in River North also offered the highest prices for three other assets as part of the Qualteq Inc. bankruptcy sale.
Real estate investment firm Cedar Street Cos. and Frontline Real Estate Partners LLC bid $4.3 million for the 17,400-square-foot building at 500 N. LaSalle St., one of eight properties in the portfolio of the credit and gift card company, which is going out of business after filing for protection from creditors in 2011.
The two firms also made top offers for two retail properties in Downers Grove — the 213,000-square-foot University Plaza Mall and 190,000-square-foot Meadowbrook Shopping Center — and a 72,400-square-foot industrial building, also in the western suburb, according to court records.
The venture has agreed to pay $8.2 million and $4.7 million, respectively, for the shopping centers and $3.6 million for the warehouse, court records show.
Both retail centers are between 85 percent and 90 percent leased, according to Alex Samoylovich, co-founder and chief financial officer of Chicago-based Cedar Street. Northbrook-based Frontline is a real estate investment firm that specializes in distressed real estate.
“We’ll be probably doing some renovations and bringing in some national and regional tenants and building some outparcels for future developments,” he said, adding that Walgreen Co., Wal-Mart Stores Inc. and Sam’s Club have expressed an interest in the properties.
Three other Qualteq assets have also been sold off, court records show:
• An affiliate of Northbrook-based Mosaic Properties & Development LLC has agreed to pay $8.8 million for North Park Mall, a 353,000-square-foot shopping center in west suburban Villa Park.
• A trust in the name of Alan M. ElShafei, chairman and founder of Woodridge-based battery and energy company Navitas Systems LLC, successfully bid $3.7 million for a 70,000-square-foot warehouse in Downers Grove.
• Midwest Industrial Funds Inc., led by Justin Fierz and Michael Androwich of Lee & Associates of Illinois LLC, has agreed to pay $3.7 million for a 109,000-square-foot warehouse, also in Downers Grove.
Mosaic Principal David Dresdner said he and his partner, Sherwood Blitstein, plan to make cosmetic improvements at the Villa Park shopping center and already have lined up financing from Associated Bank, though he declined to discuss details of the loan.
In an email, Mr. ElShafei said he liked the industrial property because of its location in Downers Grove.
“It has remained relatively stable over the past few years and I believe this market will continue to perform well into the future,” he said in the email.
Messrs. Fierz and Androwich did not return calls.
Fred Caruso, the court-appointed trustee in the Chapter 11 case, said he is “very pleased” with the bids and expects the sales to close by April 22.
The industrial buildings are leased to Valid USA Inc., which acquired the operating assets of Qualteq and its affiliates for more than $51 million last November, according to Mr. Caruso, who is vice president and chief operating officer at Chicago-based Development Specialists Inc., which focuses on financial restructurings.
Qualteq is part of a group of companies led by the Veluchamy family that was once one of the area’s biggest minority-owned businesses. The company filed for bankruptcy protection in August 2011 after running into financial problems, the result of litigation against Pethinaidu Veluchamy and his wife, Parameswari, records show.
Judge Eugene R. Wedoff of the U.S. Bankruptcy Court in Chicago approved the sales earlier this month.