CHICAGO, IL – Baltimore-based real estate investment and management company Continental Realty Corp. has acquired a portfolio of five shopping centers located throughout the Chicago market for $93.6 million.
The more than 900,000-square-foot portfolio, which was purchased from DiMucci Cos., represents CRC’s entrance into the Chicago real estate market.
The portfolio was acquired on behalf of Continental Realty Opportunistic Retail Investment Fund I, a private equity fund that launched in 2021 to acquire value-add and income-producing retail properties in targeted US submarkets. The transaction marks the fund’s fifth retail acquisition.
“The acquisition of the suburban Chicago grocery anchored retail portfolio is well-aligned with our overall investment thesis and is an opportunity to own and operate an institutional-quality real estate portfolio featuring a strong line up of grocery, drug store and necessity-based users , combined with strong value-add potential,” states Josh Dinstein, CRC’s SVP of acquisitions. “Each center is strategically located in dense infill areas with high barriers to entry, and we were able to acquire the portfolio substantially below replacement cost.”
The grocery-anchored and necessity-based assets are cumulatively 84% occupied by tenants such as Sam’s Club, the Home Depot, Jewel-Osco, Kroger, Walgreens and Ross Dress for Less. Of the portfolio’s total gross leasable area, 39% is occupied by grocery or drug stores. Each asset is located between 10 and 15 miles from downtown Chicago.
The portfolio’s assets include the 392,000-square-foot Cicero Marketplace located at 3027 S. Cicero Ave. in Cicero, IL; the 101,000-square-foot Northwest Shopping Center located at 425-569 E. Dundee Rd. in Palatine, IL; the 145,000-square-foot Golf Plaza II Shopping Center located at 1000-1080 S. Elmhurst Rd. in Mount Prospect, IL; the 241,000-square-foot Fox River Commons located at 808 S. Rte. 59 in Naperville, IL; and the 24,000-square-foot English Valley Shopping Center located at 237-285 W. Dundee Rd. in Palatine, IL.
“Our decision to enter the suburban Chicago market with a portfolio of this size will immediately enable us to leverage economies of scale,” says JM Schapiro, CEO of CRC. “We intend to target the restaurant, soft goods, entertainment and medical categories to fill existing vacancies with users that bring long-term value and enhanced energy to the center and the surrounding communities. We believe there is demand for retail space in each of these respective submarkets and, utilizing our strong broker and tenant relationships, we intend to significantly enhance the tenant mix across the portfolio.”
Dinstein adds, “There are multiple paths to value with the ability to deliver strong risk-adjusted yields to our investors. This includes leasing nearly 150,000 square feet of inherited vacancies, monetizing several existing outparcel opportunities, and implementing our asset management strategy to achieve improved cost efficiencies,”
Chicago-based real estate and development firm Tucker Development served as an acquisition and development consultant on the transaction.