Nuveen Nabs Grocery-Anchored Plaza for $27M

Nuveen is making a calculated bet on Chicago retail, picking up a Northwest Side shopping center at a modest discount.

The Chicago-based investment manager paid $27 million for Elston Plaza, a 93,000-square-foot, Jewel Osco grocery store-anchored center at 3570 North Elston Avenue, according to Cook County records. The seller, German firm DWS, offloaded the property for slightly less than the $28.4 million it paid in 2018, a reflection of how higher interest rates have compressed values across commercial real estate, Crain’s reported.

The deal underscores a split narrative in retail. Rising borrowing costs and shaky consumer sentiment have weighed on pricing, yet grocery-anchored centers continue to attract institutional capital for their steady traffic and resilient tenant mix, according to the publication.

CBRE’s George Good, Christian Williams and Michael Wilson represented DWS in the sale. Williams told the outlet that today’s pricing reflects a dramatically different interest rate environment than in 2018.

Institutional investors have approached Cook County cautiously in recent years, in part due to its often unpredictable property tax system, which can complicate underwriting. The acquisition suggests some buyers are willing to look past those risks for the right properties, according to the publication.

The center, built in 1984, offers a mix of service-oriented and quick-service tenants that have largely held up through pandemic-era disruption. In addition to its grocery anchor, tenants include ATI Physical Therapy, Chase Bank, Chipotle, Great Clips, Jimmy John’s, O’Reilly Auto Parts and Subway.

That resilience is part of the appeal. The pandemic downturn forced out weaker retailers, leaving behind a more durable tenant base that, brokers told the outlet, is now performing well.

The purchase adds to Nuveen’s recent activity in the Chicago area, where it has been active across property classes. The firm recently acquired two suburban apartment properties, and in a separate move, took control of the 35-story office tower at 321 North Clark Street by converting a mezzanine debt position into equity.

— Eric Weilbacher