CenterPoint lands 2 deals at Joliet-area intermodal

November 30, 2011

(Crain’s) — CenterPoint Properties Trust has completed two deals at its intermodal center in the Joliet area, bringing the complex to roughly half complete.

CenterPoint just broke ground on a 265,000-square-foot building for Chicago Ridge-based Resource Management Cos., which collects recyclables and
ships them to global manufacturers. RMC signed a
10-year, triple-net lease for the building, says CenterPoint Vice-President Brian McKiernan. He declined to disclose other terms of the deal.

“The export market is going to Asia, so we’re kind of excited to have a balanced operation between the export side and import side and I think RMC really showcases the export piece of the business within the park,” Mr. McKiernan says.

About two miles north of that project, CenterPoint last week sold a fully improved 39-acre site to APL Ltd., a Singapore-based shipping company. The site will be used to hold the huge containers used for shipping products. The deal includes a small administration building and a maintenance and repair facility of about 18,000 square feet on the site. CenterPoint Vice-President Jeremy Grey and an APL executive declined to disclose the sale price.

“We’ve located APL’s Chicago Global Gateway terminal at CenterPoint for a number of reasons: access to the major western railroads, easy road access and the ability to develop an advanced facility that gives us flexibility and modern technology,” APL says in
a statement. “This terminal will be a major inland hub
for APL.”

RMC did not return a call.

The transactions are victories for CenterPoint as it continues to build out the intermodal center. The company has invested about $1 billion already in the two yards, which could potentially house a total of about 32 million square feet of industrial space adjacent to intermodal terminals serving the BNSF and Union Pacific railroads. CenterPoint projects 15,000 full-time workers at the yards.

“Chicago is really the center of logistics within the country,” Mr. McKiernan says. “Being at (interstates) 55 and 80 allows retailers and importers and exporters to basically consolidate all of their inventory and distribute throughout the region.”

CenterPoint is seeing about 1 million square feet of annual absorption since the Elwood yard opened in 2001, Mr. McKiernan says. About 2,300 acres of the 6,100 acres remain undeveloped, allowing for another 15 million to 20 million square feet of buildings. The Joliet yard opened in 2008.

“We feel fortunate we’ve been able to consistently hit that mark,” Mr. McKiernan says. “Obviously it’s not easy, but I think that’s kind of our goal year-over-year.”

Mr. McKiernan says CenterPoint is well-positioned by permanent assets such as the railroad and interstates but also poised to shift focus elsewhere should Chicago lose its status as a vital logistics hub in the future.

“CenterPoint’s philosophy nationally is to go through the supply chain trade lanes … it’s not just Chicago-based,” Mr. McKiernan says, while adding “we’re bullish on Chicago and its position is the same as in New York, New Jersey, and (Los Angeles).”

Dan Leahy and Adam Roth of Oakbrook Terrace-based NAI Hiffman represented CenterPoint in the APL purchase and brokered the RMC deal on behalf of both parties. APL was represented by David Lane of Conyers, Ga.-based Burr & Temkin South Inc. and Catherine Thomsen of APL.

Posted by NAI Hiffman | Filed Under Industrial

LEASING NEWS

November 29, 2011

As seen in Real Estate BISNOW

AMEC leased 7,700 SF at 650 Warrenville Rd in Lisle, relocating from another space in Lisle. Cushman & Wakefield’s Jordan Rovito andAlex Smith repped AMEC. NAI Hiffman’s Patrick Kiefer repped the landlord, Winthrop Realty Trust.

Posted by NAI Hiffman | Filed Under General Business

Management News

November 22, 2011

Seen in Real Estate BISNOW

NAI Hiffman’s asset management group has been awarded the property management for more than 1M SF of combined industrial, office and retail product in the Chicago suburbs and Decatur. The industrial assignments include the Speedway Logistics Center, recently purchased by Molto Capital, at 3451 S Chicago in Joliet as well as two assets acquired by TA Associates Realty at 4675 Turnberry in Hanover Park and 1640 Fullerton Court in Glendale Heights. Chicago-based WH&H Realty Advisors has also assigned its Harmswood Office Center at 5750 Old Orchard Rd in Skokie to NAI Hiffman’s asset management group.

***

NAI Hiffman’s special asset solutions has recently added the following to its roster of managed properties: Riley’s Point, a 15k SF shopping center located at 12371 Derby Road in Lemont; a 41k SFindustrial asset at 1440 Davey Rd in Woodridge; and a 200k SF retail asset, Northgate Shopping Center in Decatur.

Posted by NAI Hiffman | Filed Under Asset Management

Lake County industrial market sees strong third quarter

November 16, 2011

As seen in RE Journals

Lake County may not be recognized as a core industrial market, but with a string of recent deals and strong positive absorption, commercial real estate brokers are high on the northern Illinois market.

Things are going well in the Lake County industrial market as the area is coming off of a positive third quarter that experienced more than 700,000-square-feet of positive absorption. Activity is building momentum and brokerage professionals are anticipating a strong fourth quarter to close out the year.

According to research from NAI Hiffman, the Lake Co. market has experienced 1,067,497 square feet of positive absorption in 2011, with 792,153 square feet of activity coming in the third quarter alone. This brought the vacancy rate down to 10.3 percent.

The market comprises roughly 66 million square feet of industrial space, making it the fifth largest submarket in the Chicago area, according to the NAI report. However, despite its size and recent activity, the market is never quite considered the industrial powerhouse other areas such as the I-55 corridor and I-80 corridor on the southwest side of the metro area. Simply put, it does not have the capacity to attract large-scale distribution operations.

“Overall, it is not a market that has many 500,000-square-foot buildings,” says Robin Stolberg vice president of industrial services for Jones Lang LaSalle. “Historically, there has been a real presence of mid-sized companies in Lake County. A lot the buildings are operated by user-owners.”

Lake County has always been considered more of a residential market with pockets of corporate activity. Fortune 500 companies like Abbot, Baxter, and Walgreens, call Lake County home. The trend is for firms to occupy a large corporate campus, but this does spawn ancillary activity as suppliers and third-party providers desire space in nearby locals.

Some developers have attempted to capture these firms in recent years and numerous speculative facilities went up at the height of the real estate boom. Many of the recent deals have taken advantage of this as firms are filling this vacant Class A space.

“We had an excellent quarter,” says Steve Sullivan, vice president in the Industrial Services Group at NAI Hiffman. “We have had an inventory of Class A industrial product that has been sitting empty for more than two years. Companies were looking at the market, waiting for the fundamentals to improve. The product was there for the taking.”

The biggest deal in the second quarter was a 200,000-square-foot lease by High Sierra in Gurnee. The sporting goods retailer took space in a speculative facility developed by CenterPoint Properties at 705 Tri State Parkway. The building is a part of the firm’s $117 million CenterPoint Business Center – Gurnee development.

“That was a monster deal for the corridor,” says Sullivan. “High Sierra went from 45,000 square feet to 200,000 square feet.”

In the second quarter, another large speculative facility was absorbed as Sysmex, a Japanese-based healthcare firm, signed a lease 146,850 square feet in Bridge Development’s Aptakisic Creek Corporate Park in Buffalo Grove. The firm also leased a 163,739 class A office center across the street, which Bridge Development marked for sale in September.

Sullivan also noted that Hearthware Home Products expanded its lease from 75,000 to 200,000 square feet in Libertyville earlier this year.

Taxes are part of the discussion…

Expansions of existing firms has played a large role in the recent activity, but frequently brokers field inquiries from neighboring Cook County firms looking to lower their tax base.

“Taxes are always an item of discussion,” says JLL’s Stolberg. “Whether it is a sale or a lease, there is a substantial tax difference between Cook County and Lake County.”

However, Lake County itself may now be under fire as Wisconsin has now targeted Illinois companies in the wake of the Prairie State’s decision to increases its corporate tax rate to 7 percent. That is still below Wisconsin’s 7.9 percent rate, but the state has been aggressive with its financial incentive packages to help off-set the difference and it touts its lower cost of labor as a strong draw. Several firms have made the move in the past year. Catalysts Exhibits, one of the first to do so, announced a pending move from Crystal Lake in March to a 144,000-square-foot facility in Kenosha County.

Stolberg says that bigger firms are taking this seriously and many have taken a hard look at the prospect of relocating to Wisconsin.

“The 20,000-square-foot user in Buffalo Grove isn’t looking at Pleasant Prairie (Wis.), but the 100,000-square-foot user in Waukegan is,” says Stolberg.

4^th quarter…

A prime example of this can be seen in U-Line, a shipping supply company that announced its move to Wisconsin from Waukegan in 2008. The firm left behind roughly 600,000 square feet of space.

Yet as activity picks up, NAI’s Sullivan believes that several local operations will look to expand into that space, potentially making for a very strong 4^th quarter.

“I think the 4^th quarter is going to be fantastic as well,” says NAI’s Sullivan. “Several deals are pending and I think we are going to see a lot of the space vacated by U-Line back filled this quarter. A lot of entrepreneurial talent lives nearby and owners want to be in close proximity to their homes and employee base. We are thrilled that local companies are expanding again.”

Posted by NAI Hiffman | Filed Under Industrial

Celergo Expands Operations by 4,843 SF

November 13, 2011

As seen in Globe St

Seen in Real Estate BISNOW

DEERFIELD, IL-Celergo, a provider of outsourced global payroll services, has expanded its operations at 750 Estate Dr. by 4,843 square feet to a total of 18,182 square feet within the 26,200-square-foot, class B, single-story office building. Michael Flynn and Jason Wurtz with NAI Hiffman’s office services group represented landlord ECD Co. Chris Cummings with Colliers International represented Celergo in the transaction.

Posted by NAI Hiffman | Filed Under Office

Zilber buys 126,000-square-foot industrial building in Elgin

November 9, 2011

As seen in BizTimes

Milwaukee-based Zilber Property Group recently purchased a 125,990-square-foot light industrial building at 1331 Davis Road in Elgin, Ill. The sale price was not disclosed.

Seigle Cabinet Center is leasing back a portion of the building following the sale. The remaining portion of the building is being leased to Bucher Hydraulics.

Zilber Property Group, the trade name under which Zilber Ltd. markets its commercial investment portfolio, has acquired several industrial properties in the Chicago area in recent years.

“As the Chicago metro area’s economy continues to stabilize, the I-90 corridor has gained renewed strength. We have identified this as one of our key submarkets to focus on as we continue to grow our industrial portfolio throughout Milwaukee and Chicago,” said John Kersey, Zilber executive vice president. “We were attracted to this particular building after meeting with Mark Seigle and discussing the successful resurgence of the Seigle Cabinet Center as well as Bucher Hydraulics – a strong international company that continues to grow and add jobs to the economy.”

Ken Franzese and John Cassidy of Lee & Associates represented the seller while Adam Marshall of NAI Hiffmanrepresented Zilber Property Group and Bucher Hydraulics in brokering the sale.

Posted by NAI Hiffman | Filed Under Industrial