Neiman Marcus building on Michigan Avenue gets new owner

The Michigan Avenue building rented to Neiman Marcus has a new owner. While some details are undisclosed, the circumstances of the sale indicate the retailer of luxury goods intends to stay on the swank but troubled retail street.

The brokerage Jones Lang LaSalle said it represented the buyer and seller of the four-story building at 737 N. Michigan Ave. Neiman Marcus occupies all 195,500 square feet.

Those who follow the fortunes of the Magnificent Mile had worried that Neiman, like Macy’s, might bail on the street. Neiman emerged from a Chapter 11 bankruptcy in 2020 when pandemic lockdowns hit its finances.

Jones Lang said the buyer was Silvestri Investments, a family-owned firm based in Houston. The price was undisclosed and no deed has yet been filed with Cook County. The broker said it arranged a seven-year acquisition loan.

The financing indicates confidence that Neiman will continue paying rent. The length of its lease was not revealed. “Neiman Marcus Group intends to maintain its long-term lease at 737 North Michigan Avenue, and Chicago remains an important part of our store portfolio,” said Rachel Hiatt, director of corporate communications.

Dan Silvestri, president and CEO of Silvestri Investments, said Neiman’s sales on Michigan Avenue are still strong and he expects it to remain for years. Other high-end retailers nearby also are doing well, he said. “It’s the iconic shopping street. It will turn around,” Silvestri said.

The seller was an affiliate of UBS Realty Investors, which has owned the building since 1998 when it paid $103.9 million for it. The seller could not be reached for comment.

Jones Lang said Silvestri bought the property in a 1031 exchange, which allows capital gains to be deferred if proceeds from a property sale are invested in another property. It’s typically part of a conservative investment strategy, another sign Neiman plans to remain.

“Investors turn to this tax strategy to preserve equity and defer gains. The iconic Neiman Marcus building in the heart of Chicago’s famed Michigan Avenue underscores the preservation of capital, with long-term upside in the real estate,” said Alex Sharrin, senior managing director at Jones Lang and part of a team that represented UBS.