“Perfect Storm” Driving Up Retail Assets

CHICAGO—The recent sale of Skokie Commons, a brand-new 93,000 square-foot shopping center on Chicago’s North Shore anchored by a Mariano’s, for $43.75 million is just the latest illustration that the market for grocery-anchored retail is as hot as it’s ever been. The overall improvement in the economy, combined with the modest pace of new development and the sheer amount of capital searching for deals has created the “perfect storm,” experts say, driving prices up and cap rates down whenever well-located product hits the market.

“We’ve never seen a market this aggressive,” Brandon Duff, regional director of Stan Johnson Co., tells GlobeSt.com. Duff, senior director Brad Feller, and associate director Isaiah Harf, of the firm’s Chicago office, handled the transaction. “We had tremendous activity from institutional groups, REITs and private investors.”