Lake Geneva Center Trades for $10.4M

LAKE GENEVA, WI—Officials from Jones Lang LaSalle’s Corporate Finance & Net Lease Group say they have just completed on behalf of a Midwest developer the sale of the 55,077-square-foot Geneva Commons retail center in Lake Geneva, WI, to an Illinois-based institutional real estate firm for about $10.4 million. The developer finished the center late last year after it was 100% pre-leased to six national retailers that all took on long-term triple net leases. Investors from across the country showed interest in Geneva Commons, and the sale illustrates why cap rates for net lease properties have been sinking.

“The ability to lock in long-term, stable cash flow properties is very advantageous to investors right now,” says Matthew Berres, who led the JLL on this transaction. But the economic recovery has gathered steam rather slowly, and major retailers have not yet ramped up new construction to the levels seen just before the financial crisis, intensifying competition for the new assets that do hit the market. Furthermore, “with the financing you can achieve right now, you’re still getting an attractive yield at the end of the day.”