Chicago B of A Picks Up a Buyer

CHICAGO—As reported in GlobeSt.com, the single tenant net leased market has been red hot for quite some time, as buyers bid up properties seen as safe investments. But few, if any type of property is in as much demand as banks.

The Boulder Group, a net leased investment broker in suburban Northbrook, for example, just completed the sale of a single tenant Bank of America property located at 4200 S. Ashland Ave. in Chicago to a Canadian investor for $5,150,000.

"Banks are typically the only net lease investments that offer leases of over 15 years, investment-grade tenants and include built-in rental escalations,” Randy Blankstein, president of Boulder, told GlobeSt.com. “A lot of people worry about inflation down the track and rental escalations alleviate that concern.”

Over the course of this year, the cap rates for single tenant net leased banks have sunk to a historically low level, according to a study released by Boulder. The data show that over the last four years the gap in cap rates between banks and other retail has widened to about 200 bps. Prior to the recession, that gap was usually about 50 bps.

This Bank of America property is located in a densely populated part of Chicago with over 30,000 people living within a one mile radius and over 875,000 people living within a five mile radius. The building features five drive-thru lanes and 44 designated parking spaces.

Blankstein and Jimmy Goodman of Boulder represented the seller; a Midwest based real estate developer, in the transaction.

There are ten years remaining on Bank of America's lease, which expires October 31, 2024. The lease features 10% rental escalations every five years throughout the primary term and renewal option periods.