Hoffman Estates Jewel-Osco added to Fortress’ growing grocery portfolio

The NY-based private equity giant paid about $14 million for the store, records show
By Alex Nitkin |
Research by Haru Coryne
July 11, 2019 03:00PM

Fortress co-founder, principal and co-CEO Wes Edens and Jewel-Osco in Hoffman Estates (Credit: Getty Images and Google Maps)

Fortress co-founder, principal and co-CEO Wes Edens and Jewel-Osco in Hoffman Estates (Credit: Getty Images and Google Maps)

A massive New York investment firm picked up a northwest-suburban Jewel-Osco as part of its ongoing push to acquire grocery stores around the world.

An entity of Fortress Investment Group paid just over $14.3 million last month to acquire the supermarket at 1485 Palatine Road, according to Cook County property records. The seller was a group tied to Albertsons Companies, the Idaho-based parent company of Jewel-Osco.

Fortress followed up its acquisition by taking out a $425.7 million loan on the property from Wells Fargo, records show. The loan might have been secured by additional properties not shown in county records.

The building was remodeled in 2012 and celebrated a “grand reopening” in 2013, according to a video published by Hoffman Estates official.

The real estate wing of Fortress, which focuses on distressed assets and “special situation equity investments,” according to its website, has recently widened its portfolio to include more grocery and food distribution properties. Last year, it paid $483 million to acquire a national portfolio of eight SuperValu grocery logistics sites, including three in Illinois.

And in January, the firm paid about $570 million to pick up 26 European supermarkets from the French company Casino Group, according to Retail Insight Network.

Fortress now counts some $39.2 billion in assets under management, according to its website. Founded in 1998, the firm was acquired in 2017 by Japanese telecom giant Softbank.

The company is also heavily invested in Japan, where it now owns more apartments than any other private company.

Fortress is far from the only firm investing in grocery stores around Chicago’s suburbs. Realty Income, a San Diego-based REIT, has acquired at least five Mariano’s stores since 2017, most recently by paying $36.1 million to pick up a location in Orland Park this spring.

And last year, State Farm Life Insurance paid $25.5 million for a Mariano’s store in northwest-suburban Arlington Heights.

Representatives of Fortress and Albertsons did not immediately respond to requests for comment on Thursday.