The space for the Whole Foods store on Milwaukee's East Side has been sold to a real estate investment firm for $23.5 million.
The 53,875-square-foot store space, located at 2305 N. Prospect Ave., is now owned by Pasadena, California-based ExchangeRight, according to a news release.
The store is part of a three-unit commercial condominium in the Prospect Medical Commons. It is one of three Whole Foods stores in Wisconsin.
The sale was brokered by Adam Connor of Colliers International | Wisconsin, who represented the seller, Tacoma, Washington-based investor WACO LLLC.
"Demand for well-located, net lease assets remains strong as investors are focusing their money on essential businesses," Connor said in a statement. "With retail construction in Wisconsin at a 10-year low, we expect to see continued limited inventory on the market and an increase in pricing."
It is the second time in the past five years that the East Side Whole Foods store space has been sold. An affiliate of Milwaukee-based Irgens Partners LLC sold the space in December 2016 to WACO for $22.2 million, according to state records.
Connor said the sale shows the tight market for "premier retail assets," particularly those operating as essential businesses. He noted the asset gained $1.3 million in value even though it has four fewer years of a lease term from the tenant.
"Maybe a year or two ago this wouldn’t have made sense, but during the ongoing pandemic, its not so far-fetched," he said.
Both transactions had to overcome such obstacles as the limited remaining lease term and the condominium ownership structure.
ExchangeRight has been active in the Milwaukee area. For instance, it purchased a Pick 'n Save building in Menomonee Falls for $28.4 million in May, and it bought three area Walgreens stores in October 2019 for $18.2 million.
According to its website, ExchangeRight invests in properties with long-term leases, leases backed by investment grade corporate credit, properties with tenants that operate in “necessity retail and health care industries” and geographically diverse locations with strong demographics and infill population centers, among other criteria.