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Fundamental Income has acquired the historic RH Chicago, The Gallery at the Historic Three Arts Club for $44.7 million. The property, spanning 70,000 square feet, features a rooftop park and café, and is secured by a long-term lease to RH. Fundamental Income aims to provide capital solutions for single-tenant commercial properties, supported by a $500 million equity commitment from Brookfield Asset Management. This acquisition highlights Fundamental Income's strategy to invest in unique, well-located real estate assets.
Positive
Acquisition of a historic property is strategically significant.
Long-term lease secured with RH, providing stable income.
Investment backed by $500 million equity from Brookfield Asset Management.
Negative
None.
PHOENIX--(BUSINESS WIRE)--
Fundamental Income, a Phoenix- based net lease real estate platform, announces its acquisition of RH Chicago, The Gallery at the Historic Three Arts Club for $44.7 million. The 70,000 square foot historic building formerly known as The Three Arts Club was originally constructed in 1914. The building includes six levels of home furnishings, a rooftop park and conservatory, The 3 Arts Club Café and The 3 Arts Club Wine Vault. The property was acquired subject to an in-place, long-term lease to RH (NYSE: RH).
“We jumped at the opportunity to acquire a one-of-a-kind historic asset occupied by an innovative organization that is changing the retail customer experience” said Alexi Panagiotakopoulos, Chief Investment Officer and Partner at Fundamental Income. “David and his team at Convexity did a magnificent job renovating this property and made a vision a reality. It was a pleasure working directly with David, his team, and Michael Marks of Cushman and Wakefield in a seamless transaction.”
Led by seven investment partners with a combined 50 years and $15 billion of net lease, capital markets and real estate experience, Fundamental Income is focused on sale leasebacks and single-tenant commercial properties leased to operating companies across the United States. In April 2020, the firm received an initial equity commitment of $500 million from a fund managed by Brookfield Asset Management (NYSE: BAM), a $625 billion global asset manager.
“The Three Arts Club is a historic landmark that we are proud to have reimagined and restored along with RH,” said David Nelson, Partner at DRW and Head of Convexity Properties. “We are grateful for the support of the local neighborhood and the City of Chicago throughout the process and the excitement for what we ultimately delivered. We know Fundamental Income shares our desire to ensure this property remains an anchor in the neighborhood for years to come.”
About Fundamental Income
Led by seven investment partners with over 50 years and $15B of cumulative transaction history, Fundamental Income Properties is a net lease platform, focused on investing in single-tenant commercial properties, net leased to middle-market businesses operating in a wide variety of industries that directly or indirectly serve the US consumer. Fundamental Income Properties provides real estate capital solutions and sale-leasebacks to businesses and business owners with established and growing operations across the United States.
Convexity Properties is a fully integrated real estate investment firm based in Chicago. Convexity is the real estate arm of DRW, a leading principal trading firm founded in 1992.
