|The Mariano's at 1615 S. Clark. |
Photo courtesy of Simon Konover Co.
A New York real estate investor bought the Mariano's Fresh Market in the South Loop, delivering a big return to the store's developers.
A venture managed by Leon Melohn, CEO of New York-based Melohn Properties Inc., paid $40.5 million earlier this month for the 65,568-square-foot grocery store at 1615 S. Clark St., Cook County property records show.
The sellers, a joint venture of Chicago-based Bucksbaum Retail Properties LLC, Franklin, Wis.-based Outlook Development Group and West Hartford, Conn.-based Simon Konover Co., were expected to spend $22.7 million developing the store, according to a city of Chicago report about the project from 2012. The joint venture financed the store with an $18 million construction loan from Chicago-based PrivateBank & Trust Co., according to property records.
“I'm sure it's a very nice return on equity. They created a lot of value,” said Peter Block, executive vice president in the Rosemont office of Colliers International who wasn't involved in the deal.
Nice work for them. Apparently a tenant like Mariano's is valuable. Here is your weekly commercial real estate lesson for the week:
So-called triple-net-leased buildings like the South Loop Mariano's, where tenants are responsible for taxes, operating expenses and maintenance, are coveted assets right now, said Guy Ponticiello, managing director at Jones Lang. They offer buyers a “bond wrapped in a real estate wrapper” and are more predictable than purchasing a vacant retail building, he said.