Shopping center

RPT Realty gets win over Chicago-area mall

Brian Harper of RPT Realty and Robert Levy of LBX Investment with 940 E Rand Rd, Mt Prospect, IL (RPT Realty, LBX Investment, Google Maps)

New York-based Brian Harper’s RPT Realty made at least $5 million in the $35 million sale of a Chicago-area mall to LBX Investments.

California-based LBX, led by managing partners Philip Block and Robert Levy, has purchased the 228,000-square-foot Mount Prospect Plaza at 940-1100 East Rand Road for $34.6 million from RPT Realty, whose CEO and chairman is Harper, Cook County records show .

CBRE’s Christian Williams, who represented RPT, said the deal underscores that there is demand for strong assets throughout the Chicago area.

“RPT is looking at exposure to various markets and where they see potential for rental growth and occupancy,” Williams said of the publicly traded real estate investment trust.

Although RPT bought the property in 2013 for $36.1 million, the most recent sale did not include the Walgreens National Data Center, which is located in the mall and sold for $6.2 million. in 2017. The mall also had an 85% occupancy rate. in 2013, that number jumped to 95%, according to Williams.

“I think there’s still good growth in leasing the remaining space there,” he said.

It’s a win for RPT after a few losses at Chicago-area malls over the past year. The company took a hit during the December sale of a 135,000-square-foot mall in Chicago’s Lincoln Park neighborhood. He had bought that property, called Webster Place, for more than $52 million in 2017 and then sold it for $29 million after scrapping a plan to redevelop the asset.

The mall is the 14th addition to LBX’s portfolio and the commercial real estate investment firm’s second acquisition in the Chicago area. LBX purchased the 225,000 square foot Evergreen Plaza mall in Evergreen Park for $67 million in 2021, marking the largest retail transaction of the past year at the time of the October sale.

The market has since gained momentum, with investors pouring more money into retail assets leased to traders selling so-called properties for daily needs. New York-based Brixmor has made particularly big bets on retail in the Chicago area, spending more than $160 million this year to buy three grocery-anchored malls, including a two-property deal for $130 million.

Mount Prospect Plaza has a Walmart Supercenter as its ghost anchor and an ALDI grocery store, Marshalls, Ross Dress For Less, Burlington, and LA Fitness as its anchors.

LBX’s purchase shows investors are still hungry for grocery-anchored malls in suburban Chicago, as it follows the $30.5 million sale of the Thatcher Woods Center in River Grove to the acquisitions of the east coast of Florida and the purchase of Marshfield by Allied Development. The Plaza shopping street on the south side of the city for $30.2 million.

Grocery-anchored malls accounted for more than a third of retail transaction volumes nationwide in the first quarter, according to JLL. Trades in grocery-anchored assets hit a record 735 in 2021, up 13 from the previous record set in 2014. Companies have spent more than $13.3 billion on properties, the largest share of all commercial property types and the second largest in recorded history. .

As mall prices have risen, profit margins and cap rates, a measure of the rental income a property generates relative to its purchase price, have fallen.

Williams and her CBRE colleague, George Good, have another mall, the Gateway Center at 7507 North Clark Street in Chicago’s Rogers Park neighborhood, under contract. The buyer and seller are unknown, and Williams declined to comment.