Wieboldt Stores Inc., reportedly strapped for cash, Wednesday put up for sale its 30 percent interest in the partnership that owns its flagship department store building at 1 N. State St.
”The sale is part of our overall strategy to cash in on nonretail assets and to add working capital,” Chairman Gilbert K. Granet said in a statement. ”The proceeds of the sale will be used to increase working capital and for vendor payments to bring Wieboldt`s into a more current standing,” Granet said.
Christopher A. Jansen, executive vice president of finance, said: ”No asking price has been announced. We`re looking for bids.”
The retailer said it would continue to lease approximately 220,000 square feet on the building`s first four floors for its downtown store and about 70,000 square feet on the 12th through 15th floors for its administrative offices.
Wieboldt`s reportedly may owe up to $20 million to vendors. Last month, it announced a $14 million agreement to sell its River Forest store. Sources have said the retailer may close as many as four stores because of merchandise problems and to cut costs.
The 70 percent interest in the One North State Street Partnership is held by principals and affiliates of Bennett & Kahnweiler Associates, a Rosemont real estate brokerage firm.
The majority shareholders paid $30 million to acquire their stake in the partnership as part of a sale-leaseback deal, which was simultaneous with the Dec. 20 acquisition of Wieboldt`s by an investment group headed by Granet.
The majority partners have a right of first refusal on any offer received by Wieboldt`s, Jansen said.
”I doubt very much that we`d actively pursue buying (Wieboldt`s stake)
at this moment,” said Thomas Snitzer, one of the general partners of the One North State partnership.
Snitzer, who is principal of Snitzer & Associates, a Chicago real estate brokerage, development and financing firm, estimated the value of Wieboldt`s stake at between $3 million and $4 million.
”We`re interested, obviously, since Wieboldt`s is a major tenant in the building, and we`d love to see them stay healthy,” he said.
The property`s other major tenant is the First National Bank of Chicago, which occupies 300,000 square feet on the 5th through 10th floors.
Wieboldt`s also said that 300,000 square feet of office space has become available at 1 N. State as the result of a $6 million renovation of the 16-story building. Annual rents will range from $15 to $18.50 a square foot, Jansen said.
