CHICAGO—Net leased products are quite popular these days, but it helps to have a long-term lease that will make investors more comfortable. Mid-America Real Estate Corporation's Net Lease Investment Group, for example, just brokered the sale of a two-tenant 88,000-square-foot retail building leased to Big Lots and Home Owners Bargain Outlet in suburban Crest Hill.
“When we first took on this assignment, Big Lots and HOBO each had three years of primary term remaining on their leases,” said Tom Fritz of Mid-America. “The value at the time was $1.85 million based on the combined income stream and existing lease terms.” However, a private investor in California purchased the property from its local Chicago owner for $2.25 million.
The key? “We advised our client to offer Big Lots a monetary incentive in order to obtain a fresh 10-year lease,” Fritz added. “The seller ended up investing less than $200,000 into a new store front in exchange for a 7-year lease extension. This strategic move picked up an additional $400,000 in property value, literally doubling the investment.”
The property sits along Larkin Ave., bordering Plainfield Rd. to the north and Theodore St. to the south. Major retailers surrounding the property include Jewel/Osco, Ultra Foods, Food 4 Less and TJ Maxx.
Fritz and Mark Goldberg of Mid-America represented the seller in the transaction.
“This is a prime example of how having a good brokerage team can truly add value to an asset,” Fritz concluded.
Continue Reading for Free
Register and gain access to:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
