A commercial building in suburban Chicago that hit the market earlier this year had its price cut by about 7 percent to $6.4 million.
The building at 17015 Torrence Ave. in Lansing is privately owned and leased to its sole tenant, Pep Boys, for another five years, the Chicago Business Journal reported. The national auto shop, a tenant since 2007, pays $439,000 a year to rent the 22,000-square-foot building, though that’s set to increase at the end of the year.
The property hit the market this spring with an asking price of $6.85 million.
Pep Boys faces a 1.5 rent increase as of Dec. 1 and will pay that price through the remainder of the lease, according to Marcus & Millichap’s Charlie Deckas, who is representing the seller.
“Previously the asking price was a little higher with a 6.5 percent capitalization rate, but over the last couple of weeks, it has gone to 6.9 percent, reflecting the current asking price,” Deckas told the outlet. “Auto shop buildings have become a pandemic-proof asset, and investors find that appealing.”
Auto repair shops have become more of a necessity since the pandemic, as more people shun public transportation for personal cars and “people need to get their vehicles fixed,” Deckas said.
Pep Boys has four five-year options on its lease and recently exercised its first, meaning that its lease expires at the end of November 2027.
Elsewhere in Lansing, San Francisco landlord Robert Imhoff, operating as Lansing Riverwood LLC, paid $37.7 million last month for Riverwood Apartments. Bayshore Properties bought the 354-unit complex at 3649 173rd Court for $23 million in 2015 and secured $26 million in refinancing three years later.
[CBJ] — Victoria Pruitt