NewMark Merrill has snagged a pair of shopping centers near Midway International Airport on Chicago’s Southwest Side.
The California-based firm paid $24 million for the 130,600-square-foot Pulaski Promenade in late September, and it dished out nearly $11 million for Midway Square shortly after, CoStar reported. The acquisitions were financed with approximately $18.8 million in loans from United of Omaha Life Insurance.
The Pulaski Promenade seller was represented by Mid-America brokers Rick Drogosz and Ben Wineman, while the Midway Square seller was represented by Greenstone Partners brokers Danny Spitz and Jason St. John.
The transactions are noteworthy given the tight lending environment that’s contributed to a sluggish year for real estate in Chicago, including the retail sector, which has been spotty since the pandemic.
Sales of Chicago-area retail properties have amounted to just $1.8 billion so far in 2023, down from $4.7 billion in the previous year and $4.1 billion in 2021, the outlet reported.
Some niches of the retail sector — such as centers anchored by tenants such as grocers, banks and others that cater to daily needs — are doing considerably better than big malls, for example.
“With the changing dynamics of the retail industry, NewMark Merrill believes that Pulaski Promenade and Midway Square are positioned to thrive in their community,” NewMark Merrill CEO Sandy Sigal told the outlet. “Despite the current economic climate, we were able to identify, secure financing and close on two properties that we believe are the dominant retail centers in the trade area.”
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Pulaski Promenade, located at 4136 South Pulaski Road, is 100 percent leased to tenants such as Marshalls, Shoe Carnival, Michaels, PetSmart and Ulta. It was bought from New York-based DRA Advisors, which had acquired it as part of a $2.3 billion buyout of Inland Real Estate Group in 2016.
Meanwhile, Midway Square, a 55,332-square-foot property at Pulaski and South Archer Avenue, is 92 percent leased and houses tenants such as Dollar Tree, Chase Bank and T-Mobile. It was last purchased for $13.4 million in 2019 by Denver-based Fiesta Real Estate Investment, which is now part of California-based TRC Retail.
NewMark Merrill’s retail portfolio in Chicago now totals 1.5 million square feet and is valued at over $200 million.
— Quinn Donoghue