Geneva Commons Shopping Center Sells for Half its Original Price

The Geneva Commons retail center in Chicago's western suburbs was recently sold at a substantial discount compared to its previous sale a decade ago, reflecting challenges in the commercial property market influenced by high interest rates.

Sale Details
Lamar Companies, based in Fairfield, N.J., acquired the 440,370-square-foot shopping center for $63.8 million in late April, significantly lower than the $124.5 million paid by LaSalle Investment Management in 2013. This markdown highlights the impact of high interest rates on commercial property sales, leading to decreased prices and deal activity.

Market Trends
The sale of Geneva Commons mirrors a broader trend nationally, with retail property sales volume down 14% year over year in the first quarter of 2024, and prices experiencing a 1.2% decline according to MSCI Real Assets data. Other Chicago-area retail centers, like Chicago Ridge Mall and Belden Centre in Lincoln Park, also sold at discounted prices recently.

Property Overview
Geneva Commons is currently about 88% occupied, featuring anchor tenants such as Dick’s Sporting Goods, Barnes & Noble, Crate and Barrel, and Pottery Barn. The center's occupancy has decreased from 93% in 2013, presenting a value-add opportunity for the new owner to lease up vacant spaces and boost revenue.

Financing and Representation
Lamar Companies secured a $60.2 million loan from Banc of California for the acquisition. The sale was facilitated by commercial real estate brokerage CBRE, with representation from George Good and Christian Williams for LaSalle Investment Management.

The sale of Geneva Commons at a significant discount underscores the challenges faced in the commercial property market, particularly in the retail sector, due to high interest rates and decreased deal activity. The acquisition presents an opportunity for Lamar Companies to optimize the center's occupancy and revenue potential.