Mariano's-anchored shopping center fetches $49 million
A unit of Jones Lang LaSalle paid $48.5 million for a new Skokie shopping center anchored by a Mariano's Fresh Market, the latest high-priced deal for a retail property inhabited by the growing grocery chain.
Chicago-based JLL Income Property Trust said it bought Skokie Commons, a 93,000-square-foot development at 7200 N. McCormick Blvd. that's 97 percent leased. The real estate investment trust acquired the shopping center from its developer, Chicago-based Centrum Partners.
Allan Swaringen, president and CEO of JLL Income Property Trust, said the company pursued the Skokie property in part because it sits in a densely populated market and is anchored by a Mariano's, a rapidly expanding chain with 30 stores in the Chicago area.
“We think it's just one of the great entrants into the Chicago market,” he said.
POPULAR WITH INVESTORS
Shopping centers anchored by Mariano's supermarkets have become a hot commodity among investors, who view the properties as reliable performers because the stores attract a steady stream of shoppers who generate traffic for other tenants. In November, for example, a California investor group paid $95 million for a property portfolio with three Mariano's and one Whole Foods Market.
It's unclear how much Skokie Commons cost to build, but Centrum financed the project with a $27.2 million loan from FirstMerit Bank. The Chicago office of Stan Johnson, a Tulsa, Okla.-based brokerage, represented Centrum in the sale.
A Centrum executive did not immediately return a call.
In addition to Mariano's, the building's tenants include Starbucks, Bank of America, Longhorn Steakhouse and Noodles & Co. JLL Income Property Trust said it financed the acquisition with a loan covering about half the purchase price.
JLL Income Property Trust, a unit of JLL's investment arm, LaSalle Investment Management, is a public REIT whose shares do not trade on a stock exchange. The REIT owns 23 properties encompassing 5.7 million square feet around the country, according to a recent filing with the Securities and Exchange Commission. Office buildings represent the biggest share of the company's portfolio, followed by industrial, retail and apartments.
The REIT plans to own Skokie Commons for a long time, Swaringen said.
“We're very focused on income and delivering high-quality durable income to investors,” he said.
The company, which also owns a 442,000-square-foot warehouse in Joliet, is on the lookout for more acquisitions in the Chicago area, with a focus on industrial and retail properties, Swaringen said. It's also scoping out apartment deals, but prices have gotten so high in the Chicago area that it's hard to find an acquisition that generates decent returns, he said.