DRA Advisors Selling $540M Retail Portfolio

DRA Advisors is offloading a massive retail portfolio worth about $540 million.

The New York-based firm, led by CEO David Luski, has hired Mid-America Real Estate and Cushman & Wakefield to sell the properties, comprising 3.7 million square feet across 24 shopping centers, most of which are in the Midwest, Real Estate Alert reported.

If DRA is able to sell the portfolio through a single transaction, it would mark the largest retail sale of the year by far, according to Green Street data. Given the current market conditions, it’s more likely that the firm will sell off its assets in several large chunks, though.

While higher interest rates and restricted lending activity are pushing commercial property values down, shopping centers, especially those anchored by grocery stores, have weathered the pandemic’s impact much better than other asset classes, particularly indoor malls.

Even with demand for shopping centers growing during the health crisis, Green Street estimates deal volume has dropped about 65 percent in the sector and values have declined 14 percent from their apex last year.

The offering stems from DRA’s acquisition of Inland Real Estate in 2016, when it assumed Inland’s $2.3 billion portfolio, which operated under the IRC Retail Centers banner. DRA inherited 132 properties totaling more than 15 million square feet with the deal, but the firm has since sold most of it.

The 24 properties within the latest offering are broken down into four categories: 11 grocery-anchored shopping centers, 10 valued-added centers, two urban properties and one open-air retail center. Of the 24 assets, 17 are in the Chicago area, including nine value-added retail centers, five grocery-anchored complexes and both urban properties. The one open-air retail center is the 165,000-square-foot Shops at Orchard Place in Skokie, 15 miles northwest of Chicago.

Other Chicago-area properties in the portfolio include the 54,000-square-foot Nantucket Square in Schaumburg, 123,000-square-foot Pulaski Promenade in Archer Heights and 95,000-square-foot Joffco Square in the South Loop.

— Quinn Donoghue