A U.K.-based chocolatier is lining up its first U.S. stores since being acquired by candy giant Mars early this year, with plans to move into two former Foxtrot Market spaces on Chicago’s North Side.
Hotel Chocolat has leased the approximately 2,300-square-foot former Foxtrot space at 900 W. Armitage Ave. in Lincoln Park, according to people familiar with the deal.
The premium chocolate brand also is close to finalizing a 3,800-square-foot lease at 3334 N. Southport Ave., according to Seneca Real Estate Group broker Joe Padorr. He represents the Chicago-based building owner, Harris Properties.
The two spaces are separately owned, but both are at the base of small apartment buildings on busy North Side retail avenues, and both were formerly leased to Chicago-based Foxtrot.
Foxtrot’s parent company abruptly shut down its convenience stores throughout Chicago and in other cities in April. Foxtrot founder Mike LaVitiola and a new investor are planning to reopen some Chicago stores, but several building owners — including the ones on Armitage and Southport — have been seeking new tenants.
Mars completed its takeover of Hotel Chocolat in January, and the company recently opened 25 new stores in the U.K., Confectionery News recently reported. Mars bought the company for $662 million.
Hotel Chocolat is now turning its attention to retail spaces in the United States, in a city where its new parent is a major employer.
McLean, Virginia-based Mars has been expanding its office, research and development campus on Chicago’s Goose Island in recent years. The complex is less than 2 miles from the future shop on Armitage.
Armitage Avenue
Armitage in recent years has become a go-to destination for e-commerce brands such as Warby Parker, Allbirds and Bonobos. That has led to scarce vacancy and rising rents for new tenants looking to enter the market, whether they’re traditional shops or online retailers looking for retail space, according to the largest retail landlord on the street, Acadia Realty Trust.
Acadia President and CEO Kenneth Bernstein said during a call with analysts in April that the real estate investment trust has rents expiring at $80 per square foot, with new tenants offering to pay about $120 per square foot.
Conditions described by Acadia, which is not involved in the Hotel Chocolat deal, left the East Coast investor who owns 900 W. Armitage, David Steinberg, in an ideal position when Foxtrot left. Steinberg did not respond to a request for comment from CoStar News.
Southport Avenue
The building at 3334 N. Southport is at the southern end of another high-demand retail corridor, on a stretch where rents typically are lower than those seen on nearby blocks. But recent changes, including the arrival of chef Stephanie Izard’s Little Goat and other popular Boka Group restaurants in the former Southport Lanes building kitty-corner from 3334 N. Southport, has increased demand, Padorr said.
That led the landlord to turn down what Padorr described as a below-market rent offer for Foxtrot to return.
“The market has matured since the Foxtrot lease was signed in 2018,” Padorr said.
It's unclear how many other stores Hotel Chocolat plans locally or nationally. A spokesperson for Hotel Chocolat declined to comment to CoStar News.
Hotel Chocolat was founded by Angus Thirlwell. Its first shop opened in North London in 2004. The company also has a Caribbean hotel and cacao farm in Saint Lucia.
For the Record
Hotel Chocolat was represented by CBRE broker Brent Wayburn in the Armitage lease, with Canvas Real Estate brokers Elan Rasansky and Anthony Campagni representing the landlord. Hotel Chocolat is represented in the Southport deal by Colliers International brokers Chris Irwin and David Fox and Maven Commercial broker Lorraine Adney, with Seneca Real Estate Group broker Joe Padorr representing the landlord.