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Midwest Investment Still Ripe

CHICAGO-Investors looking to diversify their portfolios have relied on the retail market, which has pushed prices even higher.

By Dana Dubriwny | Updated on September 15, 2005

CHICAGO-Foreign and institutional investors, public and private REITs, TICs, and private national and local individuals are all throwing the dice in today’s overcapitalized retail investment market.

The most attractive properties in the Midwest, says Curt Bailey, director of Midwest retail investment for Irving, TX-based Archon Group LP, have been in the tertiary markets where there has been an influx of residential growth, and within the urban core where stores can project volumes of sales based on high-density demographics. “For urban infill, the barrier-to-entry is very high, expensive, risky and takes longer to complete,” Bailey tells GSR. “On the flip side, you can get more rent and urban infill will sell for the best cap rates.”

Archon Group, the real estate subsidiary of Goldman Sachs, recently purchased phase one of Fairlane Green, Ford Land’s one-million-sf “green” retail and recreational center on the 243-acre site of the recently closed Allen Park Clay Mine Landfill in Allen Park, MI. Bailey says the company was interested in the property because of its mature and dense market. Additionally, a number of retailers identified area and were able to project healthy sales based on the location of the site.

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