STREAM Capital Partners, LLC, a national net lease and sale-leaseback advisory group, has arranged the sale and leaseback of the ground beneath a building occupied by a longstanding popular tapas restaurant in Chicago’s River North submarket.
A private buyer, an East Coast family office, acquired the ground underneath the building located at 737 N. LaSalle for $5,000,000. The site size is under 5,000 square feet and so the purchase price equates to over $1,000 per square foot, one of the highest prices for land in the submarket. The lease is structured as a 99-year, triple-net-ground lease with periodic rent increases throughout the term of the lease. Jonathan Wolfe and Jordan Shtulman of STREAM Capital Partners represented the seller on the transaction.
“This was a very unique transaction because the credit on the long-term lease is the building, not the actual restaurant operating entity, Cafe Iberico,” said Wolfe.
“The buyer got comfortable with the deal because of the market dynamics of the River North submarket, along with the fact that Cafe Iberico has been a successful operator at this location for over 25 years,” said Shtulman. “It will continue to occupy the space, generating cash flow for the building owners to service the ground rent.”
Shtulman and Wolfe both expect to see more of these types of transactions because it can be a very attractive way for owners to recapitalize a property, particularly if there is a perceived high value to the land relative to the overall property value.