Alan Krause pays CIM Group $23M for Geneva retail

Alan Krause and Mark Misencik’s Mid-America Management Corporation expanded its Chicago-area portfolio by buying part of a Kane County shopping center from CIM Group.

The Beachwood, Ohio-based real estate investment fund paid $22.6 million for a 133,000-square-foot section of the Shoppes at Geneva Commons at 702-718 Commons Drive in the western suburb of Geneva.

The portion involved in the transaction lies within a 438,000-square-foot asset, and Mid-America only bought the stretch including stores occupied by DSW, HomeGoods, JOANN Fabric and Crafts, Viking Sewing Gallery and Fresh Market stores. The deal closed earlier this month.

Los Angeles-based CIM acquired an interest in the property in 2017, when it absorbed equity for an unknown amount in the property from an affiliate of RREEF Property Trust, a REIT controlled by German asset manager DWS, Kane County records show.

The RREEF entity bought the property in 2004 for $23.5 million, meaning the latest trade came at a loss of value of about $1 million since then, although RREEF could have extracted cash from the property when it took out a $14.5 million mortgage on it in 2014, records show.

CIM did not respond to a request for comment. Paul Shand, director of retail properties for Mid-America, confirmed that the Ohio firm had acquired part of the property.

The rest of the shopping center property, which spans 438,000 square feet, traded for about $120 million in 2013, when JLL’s investment arm bought the property from two partnerships advised by Atlanta-based Invesco Ltd., according to previous reports. It was a Great Recession-induced loss for the seller, which paid $127.3 million for the property in 2005.

Chicago-area suburban retail rents have been on the rise since 2019, which a September report from Cushman & Wakefield attributed to limited construction and tight supply. Construction completions went down each year during that time frame, bringing the average asking rent on triple-net retail leases up to $17.75 in the first half of 2022 from about $16 in 2019.

Retail investment sales in the Chicago area picked up in 2021 and in the first half of 2022 after slowing during the pandemic, according to the report, with many trades of grocery-anchored assets as investors kept seeking daily needs retail.

Mid-America owns 49 retail, industrial and residential properties in 19 states, according to the firm’s website. The company’s Chicago-area portfolio also includes the Fabyan Crossing shopping center on Randall Road in Geneva.