The Boulder Group, a net leased investment brokerage firm, has completed the sale of a single tenant trophy Walmart ground lease located at 5630 West Touhy Avenue in Niles, IL for $9,685,000. The property was sold at the lowest cap rate ever recorded for a single tenant Walmart property transaction above $5 million according to Real Capital Analytics.
The Walmart property is located within an affluent area just north of Chicago. The Walmart anchors Pointe Plaza, a 330,000 square foot development that also features Ross Dress For Less, Walgreens, Fresh Farms International Market, Dress Barn and Babies R’ Us. Directly across the street from Pointe Plaza is Village Crossing, a 450,000 square foot development that features Dick’s Sporting Goods, AMC Theaters, Best Buy, Michael’s, Bed Bath & Beyond and many other national retailers. Jewel-Osco is also located across the street from the Walmart. Average household incomes within a one mile radius are in excess of $107,000 annually. Additionally, there are approximately 700,000 people living within five miles. The Walmart is well located within one of the dominant retail destinations of Chicago’s northern suburbs.
Randy Blankstein and Jimmy Goodman of The Boulder Group represented the buyer and the seller in the transaction. The seller was a Midwest based real estate development and investment company. The purchaser was a high net worth individual from California in a 1031 Exchange.
Walmart has approximately nine years remaining on their ground lease that expires February 29, 2024. The ground lease features a 10% rental escalation in the first renewal option period and 5% rental escalations in the remaining options. Walmart is an investment grade rated company (S&P: AA) and is publicly traded with a market capitalization in excess of $267 billion.
“Trophy net lease properties in irreplaceable retail locations tenanted by investment grade rated companies are highly sought after amongst the investment community and command a substantial premium” said Randy Blankstein, President of The Boulder Group. Jimmy Goodman, Partner of The Boulder Group, added, “While single tenant properties are selling in all types of locations; core markets, like Chicago, are at the forefront of investor demand.”
