Search
 

LA Fitness Sells for Record Cap Rate

CHICAGO—Edgewater has become a much more desirable neighborhood in recent years, helping fuel a lot of retail development.

By Brian J. Rogal | brianjrogal | | Updated on February 08, 2016

 

The neighborhood is home to a new Whole Foods and a new Walgreens as well. The neighborhood is home to a new Whole Foods and a new Walgreens as well.
CHICAGO— Crossroads Development has just sold its trophy single tenant LA Fitness property located at 6107 N. Broadway St. in Chicago, IL for $9.5 million. According to CoStar , the 5.63% cap rate represents the lowest sold cap rate ever recorded for a single tenant LA Fitness property. The firm renovated the free-standing building in 2014.     Randy Blankstein and Jimmy Goodman of Northbrook, IL-based The Boulder Group represented Crossroads in the transaction and say the purchaser was a high net worth individual based on the West Coast in a 1031 Exchange . “We had built the Walgreens adjacent to this property and sold that a couple years ago,” Crossroads principal Michael Nortman tells GlobeSt.com. “And our business plan was always to sell this asset when the time was right. It was time to move on and it turned out to be a great deal.” The property has a lot of qualities that buyers would find attractive. The two-level, 22,000 square foot fitness facility sits along N. Broadway St. at a signalized intersection and within two blocks of two different CTA Red Line “L” stations. Furthermore, it benefits from a close proximity to Loyola University Chicago , home to over 15,000 students. LA Fitness has over 13 years remaining on their lease, which features 10% rental escalations every five years and in each renewal option period. And the neighborhood has become much more desirable in recent years. A new Whole Foods sits immediately to the south, for example, and the new Walgreens recently signed a new 25-year lease. In addition to the LA Fitness and Walgreens properties, Crossroads recently developed a Physicians Immediate Care property. “Developing in Edgewater has been a successful venture for us and for the neighborhood,” Nortman adds. “Additionally, the buyer has retained our management group to manage the property post-closing, which is something we’ve been successful doing in over 90% of properties sold in our portfolio.” “ The property’s superior infill location within a core market allowed The Boulder Group to achieve a historic cap rate for this sale, ” says Blankstein, president of Boulder Group. Goodman, partner of the Boulder Group, adds, “i nvestors continue to aggressively target properties located in top MSA’s with long term leases and rental escalations.”

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

NOT FOR REPRINT

© 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.

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.