The world’s largest asset manager is ready to sell a Whole Foods-anchored shopping center in Chicago’s South Loop that it has owned for nearly two decades in an offering that comes amid changes to the area around it.
BlackRock has hired CBRE brokers to sell Southgate Market, a 303,810-square-foot shopping center at 1101 S. Canal St., according to a brochure from the brokerage.
If a buyer emerges, it will change hands for the first time since BlackRock and a local development firm completed construction in 2006. BlackRock now has sole ownership of Southgate Market.
It’s unclear how much it expects in a sale. New York-based BlackRock did not respond to a request for comment from CoStar News.
Southgate Market is hitting the market as the area around it evolves.
Since the shopping center opened, residential towers and other projects have continued to be developed near the Chicago River in the South Loop.
Immediately north of Southgate Market, New York-based 601W is converting a sprawling, six-story building at 801 S. Canal St. into modern offices in a project called Canal Station.
Just across the river to the southeast, Related Midwest envisions a Chicago White Sox ballpark or Chicago Fire soccer stadium — or possibly both — within The 78, its long-planned mixed-use development on 62 acres of vacant land that connects the South Loop to Chinatown.
Southgate Market is about 79% leased to tenants including LA Fitness, Marshalls, PetSmart and DSW, according to CBRE. Whole Foods has 14 years left on its lease after recently signing a 10-year extension, according to the brochure.
Overall, the weighted average lease term is 8.42 years, and the first-year net operating income for a new owner is just under $5 million, according to CBRE. BlackRock has invested almost $6.5 million on capital improvements to the 6.5-acre property in the past four years, according to the CBRE materials.
For the record
CBRE brokers Christian Williams, George Good, Richard Frolik, Peter Meyer and Madalyn Ladd are marketing the property for sale.