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Chicago

CBRE unit takes loss on $61M Northbrook retail deals

Property last sold for $66 million in 2015

ExchangeRight's managing partners David Fisher, CPA (top), Joshua Ungerecht (mid-left), and Warren Thomas, CPA (bottom) along with 2323 Capital Drive in Northbrook (Google Maps, ExchangeRight)
ExchangeRight's managing partners David Fisher, CPA (top), Joshua Ungerecht (mid-left), and Warren Thomas, CPA (bottom) along with 2323 Capital Drive in Northbrook (Google Maps, ExchangeRight)

A CBRE venture took a $5 million loss on a shopping center anchored by a Mariano’s upscale grocery store in suburban Chicago, showing that institutional retail owners might be moving on from the Windy City.

An LLC associated with the firm sold a Mariano’s-anchored shopping center, dubbed the Shops at Glen Pointe, in Northbrook for just over $60 million.

Pasadena-based REIT ExchangeRight bought the Mariano’s store for $42.15 million. Schaumburg’s North American Real Estate picked up the rest of the property, which includes an LA Fitness, a CVS and several restaurants, for $18.3 million.

CBRE Global Investors bought the 143,451-square-foot property for $65.7 million in 2015, according to public records and local media reports.

Though assets referred to as daily needs retail have seen an increase in value throughout the pandemic, a source familiar with Chicago-area retail markets told The Real Deal that values have started to fall, signaling that certain investors’ shopping spree for grocery-anchored assets could be coming to an end. A CBRE spokesman declined to comment on the transaction. ExchangeRight and North American Real Estate did not return requests for comment.

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Investors have put more than $250 million into such businesses in the Chicago metro area over the last several months, with trades of grocery-anchored assets hitting a record high in 2021 according to JLL.

Recent deals have handed profits to sellers — making the CBRE deal stand out — with owners such as Broad Reach Retail Partners profiting on deals like an $18 million sale of a Wauconda Jewel Osco to AmCap for $18 million, up from the $14 million the property fetched in 2017. In Crystal Lake, a venture led by New York investor Michael Tsoumpas recently sold a Mariano’s-anchored shopping center for a 40 percent profit in a $36 million deal.

The sale also comes as Kroger-owned Mariano’s stores may be under the eye of federal regulators, as the parent company of the approximately 45 Chicago-area seeks to merge with Albertsons. The latter is the owner of local brand Jewel-Osco, which operates about 170 stores in the Chicago area.

ExchangeRight’s portfolio includes more than 21 million square feet and $5.3 billion worth of assets under management across 47 states. North American Real Estate owns about 1.15 million square feet of commercial space in the Chicago metro area.

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Tags
CBREGrocery StoresRetail MarketSuburban Chicago