Andrew S. Hochberg started his own real estate firm in 1998 after rising to the position of chief executive officer of Sportmart and negotiating its merger with Gart Sports, a move which created the second largest sporting goods retailer in the US. He called his new venture Next Realty, as he wanted to thoroughly explore the question, “What’s next?”
That contemplative and forward-looking mindset serves the Skokie, IL-based firm well as it navigates a retail industry dealing with the negative impact of e-commerce. Next Realty historically has acquired retail centers and other properties ranging from $5 million to $50 million, and today shows commercial real estate firms how to avoid being collateral damage when anchor tenants fail. It increasingly markets retail spaces to healthcare systems and other service providers as a hedge against e-commerce. Northshore University Health System, for example, recently occupied about 35,000 square feet of space at Next’s Lincolnshire Commons once lease to Barnes & Noble.
And in 2016, the closing of The Sports Authority left the firm with five vacancies totaling close to 280,000 square feet of space. By 2018, Next had secured leases at four of the properties including an entire eight-story building in Chicago’s River North. That adaptive reuse restores the landmark building to an office use after years of retail use. Deals like these will be necessary as long as e-commerce bleeds the retail sector and causes uncertainty, store closings and bankruptcies. And after making more than 60 investments representing approximately $550 million in gross asset value, Hochberg has shown the foresight needed to creatively approach retail’s biggest problem.