DRA Advisors is selling a massive retail portfolio worth approximately $540 million.
The New York-based firm, led by Chief Executive David Luski, has hired Mid-America Real Estate and Cushman & Wakefield to sell the properties, including 3.7 million square feet in 24 malls, mostly in the Midwest, Real Estate Alert Report.
If the DRA were able to sell the portfolio in a single transaction, it would be the biggest retail sale so far this year, according to Green Street. However, given current market conditions, the company is more likely to sell its assets in chunks.
While higher interest rates and constrained lending activity are depressing commercial real estate values, shopping malls, especially those centered on grocery stores, are better able to withstand large-scale growth than other asset classes, especially indoor malls. popular influence.
Even with growing demand for malls amid the health crisis, Green Street estimates that volumes in the sector are down about 65 per cent, with values down 14 per cent from last year’s peak.
The offering stems from DRA’s acquisition of Inland Real Estate in 2016, when it took over Inland’s $2.3 billion portfolio operated under IRC Retail Centers. With the deal, DRA inherited 132 properties totaling more than 15 million square feet, but the company has already sold most of them.
The latest 24 properties for sale fall into four categories: 11 grocery anchor malls, 10 value-added centers, two urban properties and an open-air retail center. Of the 24 assets, 17 are located in the Chicago area, including nine value-added retail centers, five grocery store-anchored complexes, and two urban properties. The only open-air retail center is a 165,000-square-foot store at Orchard Place in Skokie, 15 miles northwest of Chicago.
Other Chicago-area properties in the portfolio include the 54,000-square-foot Nantucket Plaza in Schaumburg, the 123,000-square-foot Pulaski Promenade in Archer Heights, and the 95,000-square-foot Joffco Plaza on the South Loop.
— Quinn Donoghue
