Hanley Investment Group arranges sale of three-tenant retail property in Rockford

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RE Journals

Hanley Investment Group Real Estate Advisors has arranged the sale of a multi-tenant, pad building in Rockford, Illinois that is shadow-anchored by a Walmart Supercenter. The 9,000-square-foot building is occupied by Aspen Dental, Sleep Number and FASTSIGNS. The sale cap rate was 7.23 percent.

Hanley Investment Group vice president Jeff Lefko and executive vice president Bill Asher represented the seller, N3 Real Estate of Southlake, Texas—their 14th multi-tenant pad sale in the Midwest in the last 12 months. Ronald Shunia of BOSC Realty Advisors in Bloomfield Hills, Michigan represented the buyer, a private investor from Orange County, California.

The three-tenant building is located on 1.08 acres at 7310 Walton Street in Rockford at the intersection of E. State Street and Buckley Drive. State Street is the main east/west thoroughfare in Rockford with 33,000 cars per day. The 100-percent occupied property, which was built in 2008, is situated 1/2 mile from Interstate 90, connecting Rockford to Chicago and Madison, Wis.

“Aspen Dental recently renewed its lease demonstrating Aspen’s commitment to the site,” said Lefko. “The property is well located in a market with strong fundamentals. These characteristics allowed us to obtain a near stabilized value for a 10+-year-old asset with short-term leases.”

The property also benefits from the high volume of traffic created by Walmart and is clearly visible at the entrance to the center. Other nearby national retailers include Target, Ashley Home Furniture, Best Buy, Dick’s Sporting Goods, Hobby Lobby, Home Depot, HomeGoods, Kohl’s, Lowe’s, Ross Dress for Less, Texas Roadhouse, and Sam’s Club.

Last month, Lefko and Asher arranged the sale of a two-tenant retail building occupied by a Starbucks with a drive-thru and QDOBA Mexican Eats in Sioux City, Iowa, on behalf of the seller, N3 Real Estate. Hanley Investment Group procured an all-cash, 1031 exchange buyer based in Southern California and obtained a record cap rate for a two-tenant net-leased investment in the Midwest that had approximately 65 percent of the original lease terms remaining for both tenants.

“West coast investors continue to seek a better return in Midwest markets like Chicagoland’s city of Rockford and Sioux City, Iowa for assets leased to national credit tenants,” said Lefko. “Markets like Rockford and Sioux City typically feature low unemployment rates and are relatively insulated from big rent declines.”

“As the retail investment market continues to transition this year, these sales continue to demonstrate that investors are willing to transact at premium pricing for properties with excellent real estate fundamentals in ‘A’ locations in markets across the country,” Asher said.