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NEWS RELEASE

Mid-America Closes on Sale of PNC Bank Ground Lease in Chicago’s Wrigleyville Neighborhood

OAKBROOK TERRACE, Ill  (April 5, 2011) – Mid-America Real Estate Corporation’s Net Lease Investment Group announced the recent sale of an 0.43 acre ground lease for PNC Bank in Chicago’s Wrigleyville neighborhood. Mid-America brokers Tom Fritz, Mark Goldberg and Ben Wineman represented the seller in the transaction, Chicago-based Shiner Capital Partners LLC. According to Tom Fritz, the property received interest from investors across the country, but in the end, the highest bidder ended up being a private investor from Chicago.

The purchase price was undisclosed, but according to Mr. Fritz, the population density, credit tenant, and long term lease all combined to offer exactly what investors were looking for. “This was reflected in an aggressive sale price that is comparable to 2007 numbers,” he said, adding that well located credit tenant properties are getting harder and harder to find, while cap rates continue to adjust accordingly. “For example,” he said, “new 25-year Walgreens leases traded at 6.00% at the peak in 2007, then went up to 8.00% in 2009, and are now approaching 6.50% again. There is increasing demand for long term security, and judging by the PNC sale, investors are willing to pay for it.”

The PNC Bank building, completed in early 2011, is located on the southwest corner of Addison Street and Ashland Avenue in Chicago, down the street from the renowned Wrigley Field. The Wrigleyville sub-neighborhood of Lakeview, situated on Chicago’s north side, is the most populated area in the Midwest due largely to the caliber of dining, shopping, and nightlife that serves a very young demographic.    
A typical ground lease for this type of location is between 20 and 25 years, absolute Triple Net, and has rent increases of anywhere from 5% to 15% every 5 years, which helps investors hedge against long term inflation, Mr. Fritz said.

Mid-America Real Estate Corporation is a member of Mid-America Real Estate Group, a ChainLinks affiliate. Mid-America Real Estate Group is a full-service retail real estate organization that has become the Midwest’s leader in retail investment sales. For more information, call (630) 954-7300 or visit www.midamericagrp.com.

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