NY investor sells suburban Chicago grocery for 40% profit

New York investor Michael Tsoumpas sold a suburban Chicago Mariano’s supermarket for almost $36 million, reflecting the area’s strong grocery market and the premium prices the tenant’s brand has fetched owners on other real estate deals this year.

A venture led by Tsoumpas sold the Mariano’s supermarket at 105 Northwest Highway in suburban Crystal Lake to an unidentified New York family office for $35.5 million, Crain’s reported. Tsoumpas spent $25.2 million on the property in 2018, making the recent deal a 40 percent increase in value for the 74,800-square-foot store.

Grocery stores nationwide have experienced boosts to their value as they’ve traded at higher velocity than usual in the past two years. In suburban Glenview, Arizona’s Nottinghill Gate Tucson paid Chicago’s Inland Real Estate $17.7 million for the 64,000-square-foot Jewel-Osco grocery store at 1340 Patriot Boulevard. The purchase marked a 42 percent increase in value over the $12.5 million it sold for in 2017. In addition, public records show that San Diego-based REIT Realty Income, paid New York’s Melohn Properties $52.4 million for a 65,500-square-foot Mariano’s store at 1625 South Clark Street in the Near South Side. The sellers bought the property in 2014 for $40.5 million.

The Kroger chain-owned Mariano’s has a lease in the Crystal Lake property that will expire in 17 years. The store generates $1.48 million in net operating income.

The buyer was insulated from rising interest rates. An existing mortgage against the property was inherited through the deal, meaning the buyer didn’t have to take out a new loan at a higher rate. The assumable mortgage increased the price, as the loan has a rate of 4.45 percent, whereas a new one would likely come with an interest above 6 percent, said Jason Meier of brokerage Stan Johnson, which arranged the deal.

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