REIT buys mall from construction company for $29M

The 56,000-square-foot shopping center is anchored by HomeGoods and David’s Bridal

2731 N. Elston Ave (Google Maps, iStock) REIT, Shopping Center
2731 N. Elston Ave (Google Maps, iStock)

A small shopping center on Chicago’s North Side sold for $29 million to a REIT specialized in neighborhood retail properties.

Newport Capital Partners purchased Elston Logan Plaza at 2731 N. Elston Ave. from Novak Construction Company in a deal that closed last week, according to the Chicago Business Journal.

The 56,000-square-foot shopping center is anchored by HomeGoods and David’s Bridal. Located just north of Bucktown and Interstate 90, the shopping center is adjacent to West Diversey Parkway and the North Branch of the Chicago River.

Joe Girardi and Emily Gadomski with Mid-America Real Estate Corp. represented the seller.

Suburban shopping centers, especially those with food or grocery retailers, have proven more resilient than central business district properties during the pandemic. They tend to be more resistant to economic downturns because tenants are necessity-based, offering a more stable rent income than other retail formats. Even as e-commerce grows, U.S. census figures show that 97 percent of people get their food from physical stores.

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Retail has been struggling in Chicago proper, especially on the Magnificent Mile, the city’s most well-known shopping area. Two major malls in the area — Water Tower Place and The Shops of North Bridge — lost so much of their value during the pandemic that they’re now worth less than their debt.

Built in 2009, Elston Logan Plaza is home to Chipotle and a chiropractor, and is located next to other shopping and retail stores including Target, Home Depot, Michaels, a movie theater and a Starbucks.

Newport Capital Partners was founded in 2004 by Derrick McGavnic and is based out of River North. The REIT specializes in neighborhood retail investments through its three funds. Other Chicago-area assets include the Edens Plaza shopping center in Wilmette, and it paid $86 million for that property in 2019.

[Chicago Business Journal] — Miranda Davis

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