CHICAGO-Inland Real Estate Corp. has acquired The Point at Clark, a multi-level retail center, for $28.8 million. The REIT purchased the 95,455-square-foot property in an all-cash transaction from Principal Real Estate Investors, the real estate arm of Principal Global Investors.
Principal Real Estate Investors acquired The Point at Clark in 2006 from an affiliate of Skokie, IL-based HSS Management Co. for a reported $37 million. “We are very pleased with the price we paid and the return we’ll get,” says to Scott Carr, president of Inland Commercial Property Management. He tells GlobeSt. Inland Real Estate priced the asset at a 7.8% cap rate.
Located at the corner of Clark and Halsted Streets in the trendy Lakeview neighborhood, The Point at Clark is the first acquisition that Inland Real Estate has made as part of its previously announced joint venture with PGGM, a leading Dutch pension fund administrator and asset manager, according to Carr. Under the terms of the joint venture agreement, Inland Real Estate holds a 55% equity ownership interest in the venture and earns fees for asset management, property management, leasing and other services provided to the venture.
The acquisition was financed with draws under the REIT’s $150 million line of credit facility and cash on hand. Inland Real Estate expects to utilize PGGM’s equity contribution of 45% of unlevered acquisition value to further reduce the outstanding balance under its line of credit facility.
Inland Real Estate plans to obtain a mortgage on the property, which also includes on-premises parking for 175 cars. The REIT expects to utilize the proceeds from the mortgage loan to repay advances made under its line of credit facility to acquire the property. “The leveraged yield, once we place financing, is very accretive to us,” Carr says.
Completed in 1996, The Point at Clark is 100% leased to national retailers including: DSW Shoe Warehouse, Marshalls and Michaels. It has no near-term lease rollovers, according to Carr.
“We think the property has an irreplaceable location with great density and strong household income,” Carr notes. “It will always been an infill retail hub, and we’re confident not only that tenants will continue to be successful here, but that the property will be able to attract best in class retailers.”
Carr adds that Inland Real Estate is exploring opportunities for electronic signage on The Point at Clark, similar to the signage in Times Square in New York City. “The property is unique with the tower feature, and we’re looking at how we can leverage that feature to create ancillary income,” he explains.
Previously, CB Richard Ellis handled the leasing and property management, but Inland Real Estate will take those duties in-house, Carr says.
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