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Bundled Due Diligence Services for The Historic Three Arts Club - Chicago, IL

Client 
Fundamental Income
Completion Date 
Saturday, September 11, 2021
Pre-acquisition of Bundle Due Diligence Services for Historic Three Arts Club of Chicago

About the Project

Constructed in 1914, the Three Arts Club Chicago, consisting of a single 4-story 65,000 SF building, is both a city Landmark and designated on the National Register of Historic Places. The building was designed by renowned Chicago architects Holabird and Roche, and was originally utilized as a home and club for women in the three arts of music, painting and drama. In 2014-15, following a decade of vacancy, the property underwent a major conversion and restoration from residential apartments to a high-profile luxury retail store with a long-term landmark tenant.

The client, Fundamental Income, came to Partner for this historic real estate property that they were considering purchasing. It was unique to others in their NNN portfolio at the time, in that the historic façades would remain their responsibility. To accurately evaluate this property in a competitive market, the client needed to understand the investment liability and the implications of the building’s historic status as a new owner.

Partner offered historic architectural consultation, preliminary research, and provided a customized pre-acquisition due diligence service package. The property condition assessment portion of the scopes was tailored with a specialist evaluation of the building façades, which had undergone recent extensive and intricate renovation and repair. Partner’s assessment identified deficiencies and omissions from the recent facades and roofs renovation scopes, provided recommendations on the necessary course of corrective action, and advised on the apportionment of responsibility between tenant and landlord. Such recommendations informed the client's purchase decisions and supported long-term asset and budget planning for the retained portions. Land Survey and Zoning Reports were also provided in a concurrent manner, which helped the client close the deal on time.

“Thank you for the great work on this project. Your team helped us navigate a key issue given the landlord responsibilities which are outside our normal NNN box.”, said Matt Burbach, Partner of Fundamental Income.

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