Crain’s www.chicagobusiness.com – April 2, 2008

Newcastle Buys Lincoln Park Strip Mall

CHICAGO - Newcastle Ltd., which has rapidly amassed a portfolio of North Side apartment buildings in recent years, has acquired a Lincoln Park strip mall for $10 million.

Newcastle paid about $570 a square foot for the 17,514-square-foot building at 801 W. Diversey Parkway. The property is about 81% leased to Dunkin' Donuts, Performance Bicycle Shop and Back to Bed.

The seller, Chicago-based RN Realty LLC, developed the property in 1993.

"It was a good time in the market to sell," RN Realty President Leigh Rabman says of the deal, which closed March last week. "This was a well-matured asset for us."

Newcastle liked the property's Lincoln Park location and 31 parking spaces, which "is pretty unique in that area," says President and CEO Michael Haney. Avoiding the turmoil in the credit markets, the firm paid cash for the property but may "place long-term debt on it in the near future," he says.

Newcastle is known as an active apartment buyer. In a high-profile deal, it paid $122.5 million earlier this year for a seven-building portfolio of apartment properties in Lakeview and Lincoln Park. Newcastle has invested $220 million of the $500 million it raised in 2006 to buy small and mid-sized apartment and retail properties across the North Side.

The firm's retail acquisitions have been smaller and drawn far less attention, but "our firm is as focused on retail as it is on multifamily housing," Mr. Haney says. "In the last six months, we've been focusing more on retail."

As an example, Newcastle paid $3.35 million in February for a 16,127-square-foot retail property at 4066 N. Milwaukee Ave. The seller was Oak Brook-based Equities Venture Corp.

"Retail is an important part of the portfolio they're building," says David Stone, president of Stone Real Estate Corp., the Chicago-based real estate firm that represented both parties in the Diversey Parkway deal. "It may not be historically what their known for, but this is a core asset for them."

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