CHICAGO—After a few tough years, the Chicago region's retail market is once again looking good to investors. That's especially true for grocery-anchored shopping centers. Phillips Edison Grocery Center REIT I, Inc., a Cincinnati-based firm, recently acquired from Walton Street Capital its Hoffman Village, a center in suburban Hoffman Estates now anchored by Mariano's, the metro area's hottest grocer.

According to Cook County property records, the price was $34.5 million.

The purchase represents a big turnaround for the 159,443 square foot property. It was hit with a foreclosure lawsuit in 2009 as the recession deepened, and then a few years later lost Dominick's, its longtime anchor tenant.

But owners have found that bringing in Mariano's, a local grocery owned and operated by Roundy's Supermarkets, Inc., can revive a center's trade and attract investors. In fact, about a half-dozen of the retail locations around Chicago with a Mariano's have recently traded hands, and always for a solid price.

According to a recent study from Real Capital Analytics, in the first half of this year, the Chicago region's retail sector ranked second in attracting buyers, surpassing even Manhattan, the number one market in 2012. In total, the Chicago area saw $1.536 billion in sales, just behind Los Angeles, which recorded $1.582 billion in sales.

Hoffman Village also features a diverse mix of national and local tenants including AT&T, Anytime Fitness, GNC, Fannie May Candies, Hallmark, Subway, Supercuts, and Dunkin Donuts.

“The acquisition of Hoffman Village exemplifies the commitment to adding high quality grocery-anchored shopping centers to the existing portfolio,” says David Wik, senior vice president of acquisitions for Phillips Edison. “It supports the strategy of owning and managing grocery-anchored centers located in markets that demonstrate strong long-term economic and demographic fundamentals.”

Christian Williams and George Good of CBRE represented the seller.

Instant Insights /

Grocery-Anchored Centers Reviving Retail Investment

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