Chi-ball is reporting the Cubs sale is down to two finalists:

It is down to two. That is what our people are telling us regarding the Cubs sale. Thomas Ricketts is still the favorite to be the new owner of the Cubs. Real estate mogul Hersch Klaff is making a late push however. Klaff has the money, but he needs some strong baseball people surrounding him our source says. This deal could still inolve a fifty-fifty partnership with Sam Zell, where Zell would try to transfer more of the ownership at a later date.

Most everyone is familiar with Tom Ricketts and his family by now. Maury Brown named Ricketts the leader in the Cubs sweepstakes a few months ago and there is no reason to doubt that now. Here is Rickett’s profile from RedEye:

Job: Chief Executive of Incapital LLC, a Chicago investment bank that packages corporate bonds for retail investors
Age: 42
Residence: Wilmette
Bio: Former pit trader who met his wife at Wrigley Field. Formed Incapital with partners in 1999 to give retail investors an easy way to buy bonds. Son of J. Joe Ricketts, Omaha founder of what is now online broker TD Ameritrade. Forbes estimates family war chest at $2.6 billion.

Below is Klaff’s background from Retail Traffic Mag:

Hersch Klaff, a South African by birth, came to the United States 22 years ago as an accountant, but after just a few years here he turned to real estate. In 1982, his first big deal was arranging (with partners), to buy the old Marshall Fields men’s building in downtown Chicago and redevelop it into a multi-tenant retail, office and medical complex.

Through most of the 1980s, Klaff focused his attention in downtown Chicago before turning his sights on the city’s suburban retail market, which by the early 1990s was rife with distressed properties. After buying a number of significant suburban shopping centers and redeveloping them, Klaff began getting familiar with some of the big box retailers which were hitting hard times.

Klaff admits that initially these big stores held little interest for him. “They were boring, and with their long-term leases they were just coupon clipper opportunities for estate planning.” Then the proverbial light bulb went off. “We realized as we started owning these shopping centers where companies had boring, long-term leases and 25-50 year options to renew, that there was no upside in owning them as a tenant, but there was upside in buying up the leases, dividing the stores into 25,000 to 30,000 sq. ft. floor plates instead of 100,000 sq. ft. and subleasing the space,” explains Klaff.

Klaff came to understand the real asset in the shopping centers was not the income stream from the tenant but the ability to buy back the future, in certain cases, by dividing up the stores, re-tenanting the property, tripling the income and investing the money in a new transaction. The numbers are simple.

The old box retailers negotiated 25-year, renewable leases at very low sq. ft. rates. Even if Klaff Realty takes over the lease, that rate doesn’t change. But, the market certainly changes and the going rate for retail space may be three times that old lease rate. Klaff Realty goes in and pays, for example, $3 a square foot, and leases it at $9 a square foot. “The difference pays for our risk and it’s our profit,” says Klaff. It has pretty much been the company’s modus operandi ever since.

Today, Klaff Realty acquires, develops, finances, leases and manages mixed-use, office and retail real estate. It has a close relationship with a number of chains, some of which have opened in numerous Klaff Realty shopping centers: Kohl’s, Burlington Coat Factory, Target, Old Navy, Gap, Bed Bath & Beyond, Linens & Things, and Marshalls.

Very soon, one of these two will have all the hope of Cubdom placed on their shoulders. I hope they are ready for the burden.