By Ioana Neamt, Associate Editor
Chicago—The Boulder Group of Northbrook, Ill., recently closed the $9.5 million sale of a trophy single-tenant LA Fitness asset in Chicago, on behalf of seller Crossroads Development. The company has set a new record with this recent transaction—the 5.63 percent cap rate is the lowest sold cap rate ever recorded for a single-tenant LA Fitness property. Randy Blankstein and Jimmy Goodman of The Boulder Group represented Crossroads in the sale. The buyer, a high-net-worth individual based on the West Coast, acquired the asset in a 1031 Exchange.
Located at 6107 N. Broadway St. in Chicago, the two-story, state-of-the-art fitness facility was fully renovated by Crossroads back in 2014. The property is strategically situated at a signalized intersection, within two blocks of two different CTA Red Line “L” stations and adjacent to a new Whole Foods location and a flagship Walgreens store. The free-standing building is also located in close proximity to Loyola University Chicago, home to more than 15,000 students.
LA Fitness has 13 years remaining on its lease at the site—which expires in June 2029 and features 10 percent rental escalations every five years and in each renewal period. The company currently operates roughly 40 locations in the Chicago metropolitan area.
“Developing in Edgewater has been a successful venture for us and for the neighborhood,” Michael Nortman, principal at Crossroads Development said in a statement. “Additionally, the buyer has retained our management group to manage the property post-closing, which is something we’ve been successful in doing with over 90 percent of properties sold in our portfolio.”