Grocery-Anchored Health, Wellness & Entertainment Center meets Core’s Value-Add Investment Strategy
Core Acquisitions has recently completed a significant shopping center acquisition with the purchase of Rice Lake Square, a 251,584 square foot grocery-anchored shopping center in west suburban Wheaton, IL. The center was acquired from an institutional owner for $34.25 million on June 4th, 2024.
The tenant roster at Rice Lake Square, developed in 1989 and renovated in 2011 and 2019, is anchored by Pete’s Fresh Market, Studio Movie Grill, and PetSmart, and also includes Message Envy, Orange Theory Fitness, Potbelly Sandwich Shop, Men’s Wearhouse, Xfinity, and Taco Bell.
The acquisition represents the convergence of two investment theses that Core will execute. At acquisition, the center was 76.2% leased, equating to a classic value-add strategy through the lease-up of vacancies throughout the center. The other strategy is to buy retail centers that are resistant to e-commerce and instead rely on daily needs such as fitness, entertainment, food and other health and wellness businesses. The largest tenant at Rice Lake Square is Pete’s Fresh Market, an approximately 69,000 square foot grocery store that opened in 2019 after an extensive renovation of the space.
“This represents a classic value-add opportunity, a strategy that Core Acquisitions has been very successful in executing throughout our history,” said Adam Firsel, Managing Principal, Core Acquisitions. “We’re very excited about the potential at Rice Lake Square given the demographics of the area, the quality of the architecture and design of the center, and the strength of grocery, health, wellness and entertainment-oriented centers.”
Rice Lake Square is located in Wheaton, an affluent, densely populated western suburb. The center is just east of the intersection of Butterfield Rd. & Naperville Rd. That intersection is a highly concentrated retail trade area with the Danada East and West retail centers. The traffic counts near the center are 36,700 vehicles per day along Butterfield Road, 17,100 vehicles per day along Naperville Road, and 25,000 vehicles per day along Loop Drive.
Brad Joseph, Principal, Core Acquisitions, adds that some of the most attractive elements of the Rice Lake transaction include:
- Pete’s Fresh Market—the ~69,000 square foot grocery store has been a tenant at the center since 2019 and made a considerable investment in upgrading the space prior to opening. Pete’s has considerable term remaining on its lease.
- Studio Movie Grill—this entertainment-based tenant, scaled down their operations in 2021 , focusing on its best-located locations. Immediately prior to Core’s acquisition of Rice Lake, Studio Movie Grill executed a long-term lease renewal at this location including a major renovation all of its theaters.
- The former SteinMart Space—the almost 39,000 square foot space represents a great opportunity for Core to add immediate value to the property through lease-up with several prospects already in negotiations for the space.
“The make-up of the center, which is a blend of daily needs and e-commence resistant uses, makes it increasingly more marketable because of the high traffic in the center and opportunities synergistic with the existing tenant,” Joseph said. “The range of spaces available at Rice Lake Square provide a lot of versatility to new tenants including an anchor position and former restaurants ready for immediate occupancy.”
Rick Drogosz, principal, Mid-America Real Estate Corp. represented the seller in the transaction. Old National Bank provided the acquisition loan to Core. Core Acquisitions will provide property management services. Mid-America Asset Management, which has leased the center for approximately 20 years, has been retained to continue as leasing agent of e Rice Lake Square.
The acquisition of Rice Lake Square by Core Acquisitions represents the fifth significant shopping center acquisition the firm has made in just over one year. Those acquisitions total approximately 1 million square feet of space.
Late last year, Core acquired Park Center Shopping Center, in Tinley Park, Illinois. Tenants of the 132,000 square-foot center include Chipotle, CFX Fitness and Chuck E Cheese. With occupancy at acquisition at 75%, Core is in the process of implementing a value-add business plan to lease up the spaces that range from approximately 1,200 square feet up to almost 15,000 square feet.
At the same time, Core completed the acquisition of the 71,000 square foot Woodfield Plaza Shopping Center in Schaumburg, IL. At the time of acquisition, Woodfield Plaza was just 45% leased. During the due diligence process, Core successfully signed a lease with SkyZone, a kids entertainment franchise, to re-tenant the former Buy Buy Baby space. SkyZone recently took occupancy of the space and plans to open in 2024. Additional tenants of the center include David’s Bridal, Blick Art Materials, and Phoenix Salon Suites.
Just over one year ago the firm acquired two centers: Carriage Crossing, a 525,000-square-foot lifestyle center in Collierville, TN (Memphis MSA) in a joint venture with Edwards Realty and Boulevard of the North Shore, a 90,000 square-foot shopping center in Skokie, IL. Core is in the process of adding value to both centers that feature national and regional tenants.
About Core Acquisitions
Core Acquisitions is a boutique, vertically-integrated commercial real estate investment, development and management firm with offices in Deerfield and Chicago, Illinois. They primarily focus on the retail property sector with shopping centers throughout the Midwest. The company was founded in 2011 and has completed nearly $550 million worth of projects over the course of the past 13 years.
