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CBRE unit incurs loss on Northbrook Mall transactions of $61 million

ExchangeRight managing partners David Fisher, CPA (top), Joshua Ungerecht (middle left) and Warren Thomas, CPA (bottom) with 2323 Capital Drive in Northbrook (Google Maps, ExchangeRight)

A CBRE firm suffered a $5 million loss on a mall anchored by upscale grocery store Mariano in suburban Chicago, showing owners of institutional retail businesses may be moving out of Windy City.

An LLC associated with the company sold a Mariano-anchored mall, dubbed the Shops at Glen Pointe, to Northbrook for just over $60 million.

Pasadena-based REIT ExchangeRight bought the Mariano store for $42.15 million. Schaumburg’s North American Real Estate picked up the rest of the property, which includes an LA Fitness, CVS and several restaurants, for $18.3 million.

CBRE Global Investors purchased the 143,451 square foot property for $65.7 million in 2015, according to public records and local media.

Although assets called daily necessities retail have seen their value rise throughout the pandemic, a source close to Chicago-area retail markets said. The real deal as values ​​began to fall, signaling that some investors’ buying spree for grocery-related assets may be coming to an end. A CBRE spokesperson declined to comment on the transaction. ExchangeRight and North American Real Estate did not return requests for comment.

Investors have poured more than $250 million into such ventures in the Chicago metro area in recent months, with trading in grocery-rooted assets hitting an all-time high in 2021 according to JLL.

Recent deals have yielded profits for sellers – highlighting the CBRE deal – with owners such as Broad Reach Retail Partners profiting from deals like the $18m sale of a Wauconda Jewel Osco to AmCap for $18m. $14 million, compared to $14 million the property reclaimed in 2017. In Crystal Lake, a company led by New York investor Michael Tsoumpas recently sold a mall anchored in Mariano for a 40% profit as part of a $36 million deal.

The sale also comes as Kroger-owned Mariano stores could come under scrutiny from federal regulators, as the parent company of the roughly 45 Chicago-area residents seeks to merge with Albertsons. The latter owns local brand Jewel-Osco, which operates about 170 stores in the Chicago area.

ExchangeRight’s portfolio includes more than 21 million square feet and $5.3 billion in assets under management in 47 states. North American Real Estate owns approximately 1.15 million square feet of commercial space in the Chicago metropolitan area.