California-based buyer of Marina City’s retail space has “big plans” for the site

A California foundation linked to Sperry Commercial scooped up the retail and parking garages at the iconic Marina Towers for $30 million, and Rand Sperry, CEO of Sperry Commercial and one of the foundation’s trustees, said it has “big plans” for site.

Sperry said the foundation plans to renovate the site and fill two 10,000-square-foot vacancies at the retail center, which he believes was a result of the COVID-19 pandemic.

“You don’t want empty spaces on River North. It’s one of the best locations in the city,” Sperry said. 

Real estate firm JLL, which represented the seller, announced last week that Pebblebrook Hotel Trust sold the 146,000-square-foot retail space and two parking garages, totaling 900 spaces, at Marina City, 333 N. Dearborn St., to Sperry Equities, a real estate investment firm in Irvine, California that represented the foundation.

JLL said 37% of the businesses are restaurants, 30% is entertainment and 33% is service retail. 

The deal marks Sperry Equities’s 15th Chicago area property, but first downtown location, according to Sperry.

He said the purchase was made in part because of his personal interest in the towers, as well as interest in “one of the greatest cities in the world,” where his parents and grandparents were born.

Sperry added that he can see the Marina Towers from his apartment in River North.

“The two buildings — I call them corncob buildings. It’s just so iconic, and I always thought as a little kid about how iconic they look,” he said.

The Marina City Towers, called the “symbol of new Chicago” in a 1963 Sun-Times story, was designed as a mixed-use complex by architect Bertrand Goldberg in the early 1960s.

The riverfront condos have made an appearance in the 1980 film “The Hunter,” when a fugitive, chased by bounty hunter Ralph “Papa” Thorson played by Steve McQueen, goes flying in his Cutlass Classic off the building’s 17th floor and into the Chicago River.

And it’s left a more permanent mark on one former resident, who tattooed the towers on his thighs.

More entertainment options

Some of the property’s current tenants include the restaurants Yolk, Tortoise Supper Club and 10pin bowling lounge, as well as the pingpong club Spin.  

Sperry said he hopes to add an Italian restaurant, a nightclub or experiential tenants like a Top Golf or indoor pickleball court — something that will “provide some cool entertainment for the people that live here.”

He said Smith & Wollensky is undergoing a $4.5 million renovation and Legal Sea Foods, replacing Dick’s Last Resort, is expected to open this year after a nearly $3 million improvement.

Most of the businesses have long-term leases, between five and 12 years, and Sperry said the plan is to renew leases with the current tenants.

“The tenants do not want to leave. They like being there,” he said.

Keene Addington, owner of Tortoise Supper Club, said they haven’t heard of any changes that will take place to their business. Given the timing of the deal just after the holidays, he expects to hear from Sperry soon, he said.

“We don’t know what their plans are, but I mean the deal just closed,” Addington said.

Yolk CEO Taki Kastanis was aware of the deal but had not heard of any planned changes for the property.

“Our Marina City Yolk location is one of our busiest in the company, and we expect to continue to be successful at that property for years to come,” Kastanis said in an email.

Ron Silvia, partner and vice president of sales at Jefferson Beach Yacht Sales, said the group plans to stay in Marina City. He said business was good last year, but down slightly from 2022.

‘Legacy of Marina City’

Pebblebrook, based in Bethesda, Maryland, put the property up for sale in May and sold seven properties last year, totaling $330.8 million, according to a news release. The money will be used for “general corporate purposes,” including paying debt and repurchasing shares.

Pebblebrook did not respond to requests for comment. JLL was unable to comment on why Pebblebrook sold the property.

JLL said retail remains strong with shopping center vacancy trending below 5% nationwide and store openings outpacing store closings.

“River North remains an attractive destination for experiential and dining retail tenancy,” Michael Nieder, director, capital markets at JLL’s Chicago office, said in an email.

Sperry said he hopes the businesses in Marina City will continue to remind Chicagoans to check out downtown, which he said gets a bad rap as being unsafe. He recalls visiting Marina City during his childhood and is excited to share that experience with Chicagoans and tourists.

“So this is really kind of fun, this opportunity to continue the legacy of Marina City,” he said.