Niki Group buys Crystal Lake strip mall from DRA for $16M

UPDATED, May 30, 2023 9:30 a.m.

DRA Advisors, one of the Chicago area’s biggest retail landlords, cashed out of a strip mall in the northwest suburbs.

An LLC tied to DRA’s property manager for the Chicago area, a firm called Pine Tree with offices in Northbrook and Oak Brook that specializes in open-air shopping centers, sold the Bohl Farm Marketplace at 5260 Northwest Highway in Crystal Lake to San Diego’s The Niki Group for $16 million, according to McHenry County records. 

The Niki Group financed the deal, which was executed May 11 and recorded May 15, with a $9.5 million loan from Wells Fargo. The firm did not respond to a request for comment.

The sale appeared to be profitable for DRA — the firm paid $12.7 million for the property in 2016, according to online property records. A Pine Tree spokesman could not be reached for comment.

Though all sectors of commercial real estate face headwinds, the outlook for retail is positive. Nationally, core retail sales grew by 0.6 percent in April, according to a May report from Institutional Property Advisors. Meanwhile, sales at bars and restaurants were a big reason for retail’s resilience, as such deals were up 9.4 percent year-over-year in April, with fast food and casual dining playing a major role in the sector’s growth.

Sales volume in other commercial real estate asset classes has plummeted since interest rates started rising last year, including in the Chicago-area’s industrial market, which was down to $392 million in the first quarter of this year, marking a 58 percent decrease in volume compared to the same time last year, according to NAI Hiffman.

Niki Group’s 97,000-square-foot retail center was built in 1999, and fetched $159 per square foot from the firm, according to property records. Tenants include Five Below, Party City, Planet Fitness, Fresh Thyme, Panda Express and McAlister’s Deli, with Kohl’s and Target serving as shadow tenants with stores adjoining the Niki Group’s newest property.

Helmed by CEO David Trakman, The Niki Group was founded in 2015. Its focus is build-to-suit and sale-leaseback deals for regional and national retailers, as well as providing equity to retail developers through joint ventures.

Pine Tree manages 20 million square feet and $3 billion worth of assets across the country. The firm still operates another large Crystal Lake retail asset nearby, the 317,000-square-foot Crystal Point, also on Northwest Highway. Pine Tree’s Chicago-area portfolio totals about 40 properties, according to the firm’s website.

DRA, meanwhile, is selling the rest of its Chicagoland retail portfolio that it obtained through its 2016 acquisition of Inland Real Estate’s properties for $2.3 billion. Of the 24 properties, 17 are in the Chicago area, and the value of the entire portfolio has been pegged at around $540 million by the seller.

Correction: This story was updated to clarify that Pine Tree was the Crystal Lake property’s manager, not the seller, and to add context about DRA Advisors.

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