Sentinel Net Lease has acquired two Schnucks Fresh Food Grocery Stores for $18.3 million in Illinois. The first property, located in Loves Park and acquired for $11.7 million, is 142,357 square feet and sits on 15 acres of land. The second, located in Normal and acquired for $6.6 million, is 57,000 square feet and sits on 6 acres. These stores align directly with Sentinel’s strategy of executing opportunistic acquisitions of pandemic-resistant, mission critical real estate that has the potential to generate passive income for investors even in adverse macroeconomic scenarios.
The St. Louis-based Schnucks supermarket chain has more than 14,500 employees in 123 stores across five states, making it one of the largest privately held chains in the U.S. With revenue of $3.1 billion in 2019, Schnucks has maintained consistent expansion and growth. With the addition of these properties and three more acquisitions scheduled before the end of the year, Sentinel is on pace to acquire more than $78 million in real estate assets by year-end.
Dennis Cisterna, Sentinel’s chief investment officer, said, “Schnucks Fresh Food Grocery Stores represent a primary essential service where demand and revenue have remained strong during the COVID-19 pandemic. Additionally, Schnucks is a tech forward business that participates in online ordering and delivery, which has been the fastest growing revenue sector in retail over the past year.”
The Normal, Illinois property is in a prime location benefiting from residential growth in the Bloomington-Normal Metropolitan Statistical Area (Pop. 173,231), with no immediate competition from other grocery chains. The area was voted Top 25 Best Small Places for Business & Careers by Forbes and Digital Capital of Illinois by Google. Normal is also home to a 2.6-million-square-foot manufacturing plant operated by electric-truck maker, Rivian. The Loves Park location is situated along the Rock River and part of Rockford, Illinois, an area that has had low local unemployment rates, a highly educated workforce and home to several universities.
Fred Lewis, Sentinel CEO, said, “As long-term investors, we’ve been able to capitalize on short-term volatility to make strategic investments at what we believe to be incredible risk-adjusted returns. We think we have a good runway to continue this type of investing as there is less competition for stable, middle market commercial real estate assets than normal.”
Sentinel conducts proactive analysis and investment based on rapidly shifting demographic and economic trends. The firm’s principals have decades of experience in commercial real estate investing across multiple asset types and classes.
