Albany Park strip mall sold
(Crain's) — A Southern California real estate developer has purchased an obscure Northwest Side strip mall for about $9 million, or about $275 a square foot.
Despite the hefty per-square-foot price, the deal could have an initial return, or capitalization rate, of 8.7%, above the average "cap rate" for all retail investments in the Chicago area this year.
A venture managed by Mark Vakili, president of Newport Beach, Calif.-based real estate firm Commpros Inc., acquired the 33,000-square-foot center at 4445-53 N. Pulaski Road in the Albany Park neighborhood, property records show. The deal closed last month.
The center's tenants include J. P. Morgan Chase & Co. and Little Caesar Enterprises Inc. The seller was DCR Management LLC, a South Side firm.
The property has a current annual net operating income of $786,710, according to marketing material distributed by Cleveland real estate brokerage firm Chartwell Group LLC, which auctioned off the property Sept. 25.
The deal's estimated 8.7% first-year return would be higher than the 6.8% average for all Chicago-area retail investment during the first 10 months of 2007, according to a November report by New York-based real estate research firm Real Capital Analytics Inc. Cap rates, similar to a price-earnings ratio in stocks, are calculated by dividing net operating income by price.
Mr. Vakili and a Chartwell representative did not return calls requesting comment.
The auction attracted eight bidders from six states, according to Chartwell's Web site. The purchase was financed by a $7.3-million loan from a subsidiary of the New York-based Goldman Sachs Group Inc.
