Canyon Johnson works magic in Chicago's South Loop.

CHICAGO, IL: Three years after beginning the redevelopment of Chicago's former police headquarters, Canyon Johnson Urban Funds (CJUF) and three of Chicago's most respected real estate firms--Mesirow Financial Real Estate, Inc., Near North Properties, Inc., and Northern Realty Group, Ltd.--have sold the Shops at State Place.

This retail center and public garage is part of a large mixed-use development in Chicago's South Loop.

New York investment manager, BlackRock Realty, purchased the property consisting of 61,796 s/f of retail and a 156-car garage.

The property is located on the entire block of South State Street between 11th and Roosevelt Road, the former address of the Central Police Station and Courts Building.

In 2003, Canyon Johnson/State Street Partners demolished the existing building and developed State Place, a 243-unit condominium building, with ground floor retail and an enclosed private parking garage.

Today, State Place has sold all but eight housing units, and the retail space is 85 percent leased, with retailers including Walgreen's, Fitness Formula Health Club and Spa, Coldwell Banker Real Estate, Charter One Financial, H & R Block, Verizon Wireless, Hair Cuttery and Benchmark Medical.

"This sale demonstrates that State Place and the surrounding community are thriving," said Bobby Turner, managing partner of Canyon Johnson Urban Funds. "As investors in urban areas, we look for exactly this type of opportunity to turn a dilapidated building into a high-quality mixed-use development that transforms the neighborhood."

Canyon Johnson Urban Funds is a partnership between Canyon Capital Realty Advisors and Earvin "Magic" Johnson's Johnson Development Corporation. The Funds' investment strategy is to identify, enhance and capture value through the development, redevelopment, acquisition and repositioning of urban real estate.

For 70 years the property was the site of Chicago's police headquarters. At the time of the demolition it held a run-down thirteen-story building. "We were very concerned that State Place match the neighborhood in terms of architecture and historical feel," said Jim Loewenberg, president of Loewenberg Associates and Near North Properties.

"We're proud to have created a street scene that is representative of the flavor of the community and highlights the exciting commercial and residential growth of the South Loop area." Situated in one of Chicago's most historically significant neighborhoods and located near Grant Park, the museum campus, major expressways and mass transit, State Place occupies a setting unsurpassed in terms of location, access and neighborhood amenities.

"State Place was a very complex redevelopment project because it was designed to meet a multitude of community needs in the South Loop," said Mike Szkatulski, senior managing director of Mesirow Financial Real Estate. "What today looks like a seamless mixed-use development has many important features including critical access to public transit, high residential density, significant ground floor retail and public parking."

Canyon Johnson and State Street Partners were represented in the transaction by CB Richard Ellis' Chicago Shopping Center Investment Team of George Good, Rich Frolik, Robert Mahoney and Bill Wright.