19 Feb Suburban Chicago Oak Brook shopping center sold by Choice Properties to DWS
A Canadian investment firm has sold an Oak Brook shopping center for a loss in one of the biggest local retail property sales of the past year.
Toronto-based Choice Properties Real Estate Investment Trust sold the Shops at Oak Brook Place, a 177,000-square-foot property just down the street from the Oakbrook Center mall, for $75.3 million last month to an affiliate of DWS, a unit of Deutsche Bank, according to documents filed with DuPage County. That’s down nearly 18 percent from the $91.3 million value that Choice put on the shopping center in May 2018, when it acquired the property’s previous owner.
Shopping centers have lost their appeal to investors over the past several years, as online retail competition has intensified and more chains have closed stores or gone bankrupt. While the broader commercial property market has flourished, many shopping centers have fallen in value as investors steer clear of the sector.
Sales have fallen as well: Investors completed $2.1 billion in retail acquisitions in the Chicago area last year, down 39 percent from 2018, according to New York-based research firm Real Capital Analytics.
Big deals have been scarce, too. At $75.3 million, the Oak Brook sale is the biggest single-property retail deal in the Chicago area since May, when the Apple store on North Michigan Avenue sold for $79 million.
The Shops at Oak Brook Place, at 2155 W. 22nd St., is almost completely full, with tenants including Nordstrom Rack, TJ Maxx, DSW and World Market. Pier 1 Imports, which recently filed for bankruptcy protection, also leases space in the shopping center; its store there is not on a list of locations the chain plans to close.
Choice acquired the shopping center as part of its $16 billion acquisition of Canadian Real Estate Investment Trust in May 2018. The property was valued at $91.3 million at the time of the transaction, according to a deed filed with DuPage County.
The sale to DWS made sense for a simple reason: Choice doesn’t own any other properties in the United States.
“The asset was not aligned with our long-term strategic focus, considering it was the only asset we owned in the United States,” Choice President and CEO Rael Diamond said in a recent conference call with analysts, according to a transcript.
A Choice representative did not respond to an email seeking comment.