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Hanley closes $3.8 million sale of Indiana Aldi

Hanley closes $3.8 million sale of Indiana Aldi,ph01

Hanley Investment Group Real Estate Advisors has arranged the sale of a newly remodeled, single-tenant net-lease property occupied by Aldi in Mishawaka, Indiana. The sale price was $3.795 million, representing a cap rate of 4.5 percent.

Hanley Investment Group executive vice presidents Jeff Lefko and Bill Asher and associate Dylan Mallory, in association with Midland Atlantic Properties, Inc. of Indianapolis, Indiana, represented the 1031 exchange buyer, a private investor based in San Jose, California. The seller, a private investor from Vero Beach, Florida, represented himself.

Originally built in 2007 and remodeled in 2019, the 20,000-square-foot, single-tenant Aldi building is located at 210 W. Douglas Road on a 2.34-acre outparcel to a Home Depot-anchored shopping center, across the street from St. Joseph Regional Medical Center Hospital and 2.5 miles from the University of Notre Dame. According to Lefko, Aldi signed a brand-new, 20-year, absolute triple-net ground lease during escrow with rental increases every five years and renewal options.

“Single-tenant net-leased ALDI properties are extremely attractive to investors that can live with the low returns,” said Lefko. “Not only do they offer long term leases with fixed increases but the rents are almost always at or below market giving the buyer comfort that their income is replaceable in the future.”

“In this case, Aldi is strategically located near the signalized, hard-corner intersection of West Douglas Road and North Main Street, averaging 29,000 combined vehicles passing by each day. The site is positioned as an outparcel to Home Depot, increasing consumer traffic to the site and providing excellent exposure for Aldi,” said Lefko.

Mallory adds, “The site is ideally located in a dense retail corridor with national and credit tenants including a 24-hour Walmart Supercenter, Costco, T.J. Maxx, Sam’s Club, and others. Additionally, the site is ideally located down the street from St. Joseph Hospital featuring approximately 293 staffed beds and over 650,000 square feet of infrastructure. The site serves a dense population of more than 154,000 residents with an average household income of $69,000 located within a five-mile radius.”

The Aldi location neighbors the university town of South Bend and is connected to Chicago and Indianapolis via Interstate 80/90 and US Route 31. Surrounding retailers include Burlington Coat Factory, JOANN Stores, Fresh Thyme, Hobby Lobby, Bed Bath & Beyond and Ashley Furniture. University Park Mall is a strong regional retail hub just east of the University of Notre Dame.

Lefko also noted that included in the sale was the adjacent land parcel for additional parking that was purchased directly from Aldi. “In escrow, we arranged for a simultaneous purchase of the additional adjacent land that Aldi was using for parking. Aldi expanded their footprint into a portion of this land, renovated the building and added more parking.”

The Aldi investment in Mishawaka represents Hanley Investment Group’s 9th Aldi investment sold or on the market in the last 24 months. In Litchfield, Illinois in early July, Lefko and Asher arranged the sale of the pre-sale of a new-construction, single-tenant Aldi at Litchfield Plaza shopping center. The sale price was $1,675,000 for the triple-net absolute ground lease. In 2018, Lefko and Asher sold the 2018’s lowest cap rate for a single-tenant net-leased Aldi nationwide. The property, located in San Jacinto, California, sold for a 4.26% cap rate.