The number of stations in Chicago declined 10% last year to 452, said the report. Other local Shell sites are being marketed to companies that would run them as convenience stores [image-nocss] that sell gasoline. Shell said more than 100 area stations are being sold, mostly to these buyers.
Houston-based Shell is selling off its retail holdings by 2010. The company is continuing its plan to dissolve its multisite-operator (MSO) partnerships and to grow through the wholesale class of trade, including wholesaler joint ventures, transitioning more markets from direct-supplied to wholesale- or wholesale/joint-venture-supplied markets. (Click here for previous CSP Daily News coverage.)
However, Shell has a plan to become the largest retail brand in the Chicago metropolitan market within five years, it said last year. In April, it signed supply agreements with three prominent, high-volume petroleum companies in northern Illinois. The agreements, the terms of which were not disclosed, were expected to help enable Shell to significantly ramp up its retail presence in northern Illinois, with a stated goal of taking over the top spot in the retail market. (Click here for previous coverage.)
The company would not comment on the five North Side sites, the publication said.
Scott Gendell, president and CEO of development firm Terraco Inc., Skokie, Ill., is considering making an offer for some of the sites. "A lot of people are analyzing the Shell real estate right now," he told Crain's.. "I haven't bought any Shell sites yet, but that isn't to say that I won't be buying some eventually. The problem is that this isn't a great time to be buying pricey real estate."
Shell is believed to be scaling back asking prices, the report said, adding that sources said the company wants $3 million for one of the locations, a 26,000-square-foot site, or about $115 a square foot.
"That same property would have had a $175-a-foot asking price 18 months ago, when the market was healthier," Keith Lord, president of Lord Cos., a Chicago real estate brokerage, told the publication.
Lord added that the sites may attract fast-food chains. "I represent Dunkin' Donuts in Chicago," he said, "and can tell you that they'll be looking at these sites if they become available for retail use."
Larry Urbieta, a franchisee at the North Avenue and LaSalle Street Shell, is hoping the deal for that property falls through. After operating the station for 10 years, his lease runs out in April. "We've got a very small, old-fashioned gas station-something of a dinosaur," he told Crain's. "I was hoping nobody would bid on it and I'd be able to stay on. At this point the Shell people aren't telling me anything."
Shell Oil Products US, a subsidiary of Shell Oil Co., has a network of approximately 6,100 branded gas stations in the western United States. Motiva-which operates the eastern and southeastern (including East Texas) U.S. refining and marketing businesses for Shell and Saudi Refining Inc. (SRI)-possesses a marketing network that supports approximately 7,700 Shell-branded stations.
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