Benzinga | Oct 28, 2021 07:43AM EDT

Fundamental Income Acquires Landmark Property - RH Chicago For $44.7M

Fundamental Income, a Phoenix- based net lease real estate platform, announces its acquisition of RH Chicago, The Gallery at the Historic Three Arts Club for $44.7 million. The 70,000 square foot historic building formerly known as The Three Arts Club was originally constructed in 1914. The building includes six levels of home furnishings, a rooftop park and conservatory, The 3 Arts Club Caf? and The 3 Arts Club Wine Vault. The property was acquired subject to an in-place, long-term lease to RH (NYSE:RH).

"We jumped at the opportunity to acquire a one-of-a-kind historic asset occupied by an innovative organization that is changing the retail customer experience" said Alexi Panagiotakopoulos, Chief Investment Officer and Partner at Fundamental Income. "David and his team at Convexity did a magnificent job renovating this property and made a vision a reality. It was a pleasure working directly with David, his team, and Michael Marks of Cushman and Wakefield in a seamless transaction."

Led by seven investment partners with a combined 50 years and $15 billion of net lease, capital markets and real estate experience, Fundamental Income is focused on sale leasebacks and single-tenant commercial properties leased to operating companies across the United States. In April 2020, the firm received an initial equity commitment of $500 million from a fund managed by Brookfield Asset Management (NYSE:BAM), a $625 billion global asset manager.

"The Three Arts Club is a historic landmark that we are proud to have reimagined and restored along with RH," said David Nelson, Partner at DRW and Head of Convexity Properties. "We are grateful for the support of the local neighborhood and the City of Chicago throughout the process and the excitement for what we ultimately delivered. We know Fundamental Income shares our desire to ensure this property remains an anchor in the neighborhood for years to come."