Editors’ Weekly News Roundup March 31 – April 4
The onetime second city (a title now claimed by Los Angeles, in terms of population) came in first this past week. Three of the five most-read stories on Connect CRE originated in the Chicago region.
That includes the week’s top story, which concerned one of the surest bets in retail investment sales: name-brand grocery operators. Net-Leased Jewel-Osco Property in La Grange Park Sells recounted a life insurance company’s trade of a property that has long been occupied by the same tenant. When Jewel-Osco’s current lease expires in 2044, the supermarket will have occupied the site for 80 years.
“This asset generated significant interest, with nine written offers and one of the lowest cap rates achieved for a full-service grocer in the Midwest in recent years,” said Adrian Mendoza, first vice VP investments at Marcus & Millichap, which arranged the sale.
In second place was a financing story on a large collateralized loan obligation transaction. We reported in TPG RE Finance Trust Closes $1.1B CRE CLOthat the New York City-based balance sheet lender placed $962.5 million of investment grade securities with institutional investors as a consequence of closing the CLO.
Simultaneously, the company redeemed a previous commercial real estate CLO with approximately $114.6 million of investment-grade securities outstanding. The two transactions combined resulted in net cash proceeds of approximately $191 million.
Back in the Chicago metro area, an industrial developer acquired land for the newest in a lengthy series of projects it has seen through within the region. That fact per se may have been of less interest than the specifics of the site and the strategy behind the acquisition.
The development parcel detailed in Bridge Industrial Acquires 12-Acre Site in Downers Grovecurrently contains an outmoded, single-story office property, meaning that the site will have new life even if the office building will not. “We are focused on sourcing off-market opportunities of functionally obsolete, struggling suburban office properties to transform them into modern sustainable industrial facilities,” said Bridge Industrial’s Jon Pozerycki. The story ranked third for the past week.
Returning to the national stage and moving into a different sector, the past week’s fourth most-read story reported on industry research from the world’s largest CRE services firm. In U.S. Hotel Sector Forecast Calls for 2% RevPAR Growth, CBRE said the growth will come largely from room rate gains, because other contributors like inbound international travel, airline passenger throughput, real GDP growth and growth in discretionary income are slowing.
The strongest RevPAR growth will occur in big-city lodging properties, CBRE predicted. The U.S. forecast occurred in the context of the firm’s 2025 global report on the hotel sector.
Our top five for the past week came almost full circle with another story about the retail sector in the suburbs of Chicago, and as with the top story it involved food. This time, though, the transaction was a lease rather than a sale.
Lee & Associates Negotiates Retail Lease at Naperville Shopping Center concerned the expansion of a locally popular restaurant, The White Sheep, into a second location. The new outpost for the breakfast and brunch establishment will be in a walkable downtown area, near a college campus.