Grocery Frenzy Still Alive In Chicago With $70M In Sales

The humble grocery store market, a mainstay for real estate investors throughout the pandemic, is prospering in Chicago, where two properties just sold for a combined $70 million.

Realty Income, a San Diego REIT, paid New York’s Melohn Properties $52.4 million for a 65,500-square-foot Mariano’s store at 1625 South Clark Street in the Near South Side, public records show. It was at least the sixth time Realty Income has bought a store branded by the upscale grocer since 2017.

In suburban Glenview, Arizona’s Nottinghill Gate Tucson paid Chicago’s Inland Real Estate $18 million for a 64,000-square-foot Jewel-Osco grocery at 1340 Patriot Boulevard.

The deals underscore the relative safety of food stores compared with the challenge of trying to fill storefronts on high-end urban shopping strips such as Chicago’s Magnificent Mile and State Street. It isn’t just Illinois: Two South Florida sales for a combined $57 million this month helped ignite interest in retail from investors seeking a steady cash flow, The Real Deal reported.

Neither the buyers nor the sellers on the Chicago sales responded to requests for comment. The South Loop deal provided a margin of almost 30 percent above Melohn’s 2014 purchase price, and Jewel sold for 40 percent more than its 2017 price, public record show.

The sales came as about a quarter of the Mag Mile’s retail space stands empty and landlords and city leaders mull how to turn around the pandemic-battered strip.

This spring, Brixmor bought a suburban Whole Foods for $26 million, or $257 a square foot. Since then the firm upped its bet on grocery centers by paying $75 million for Elmhurst Crossing and $60 million for North Riverside Plaza.