Spec industrial building under way in Elgin

February 2, 2012

Pancor Construction & Development LLC has begun work on a 166,000-square-foot speculative industrial building at an Elgin business park. The facility, slated to be finished this summer, will be the fourth building in Elgin-based Pancor’s Randall Point Business Park near the intersection of Interstate 90 and Randall Road. The other buildings in the park are fully leased. Pancor is developing the building with Boston-based TA Associates Realty. Dan Leahy and Adam Marshall of Oakbrook Terrace-based NAI Hiffman are leasing the building. A lease is in the works for about a third of the space, Mr. Leahy says, declining to identify the prospective tenant. The park has room for another 1 million square feet, says Pancor Principal Richard Panichi.

Posted by NAI Hiffman | Filed Under Industrial

Darwin Realty & Development Corp. Announces Deals

January 17, 2012

As seen in RE Journals

Darwin Realty & Development Corp. has announced more than 243,000 square feet in sale transactions. The transactions include:

27,000 square feet at 601 Carboy Road, Mt. Prospect, to 601 Carboy LLC. Richard Daly, SIOR, principal/president, and Dan Prendergast of Darwin Realty & Development represented the Buyer, 601 Carboy LLC, and Steve Sullivan of NAI Hiffman represented the seller. The building has two drive-in-doors and a 14-foot clear ceiling height.

10,000 square feet at 278 Park Ave., Lake Villa, to SAI Infusion Technologies. Dan Prendergast of Darwin Realty & Development represented the buyer, SAI Infusion, and Steve Sullivan of NAI Hiffman represented the seller. The building features one drive-in-door and one exterior dock.

Posted by NAI Hiffman | Filed Under Industrial

The Globe St Deal Wrap

January 8, 2012

As seen in Globe St

SCHAUMBURG, IL- KBS Real Estate Investment Trust, based in Newport Beach, CA, has finalized two lease agreements for 32,207 square feet at its Woodfield Preserve Office Center complex here. KBS acquired the 647,216-square-foot property in 2007. Hitachi High Technologies America, a developer of electron microscopy solutions, renewed its 26,595-square-foot lease on the fifth floor of Woodfield Preserve I. Chad Freese and Victor Toft with CBRE in Chicago represented Hitachi in the transaction. Nippon Life Insurance of America, a subsidiary of Japan-based Nippon Life Insurance Co., signed a new lease for 5,612 square feet at Woodfield Preserve II. Nippon Life was represented by Dan O’Neill with NAI Hiffman and Tak O’Hara with White Cube. Mark Smith, Rob Graham and Allison Reynolds with CBRE’s Schaumburg’s office represented KBS in the two transactions.

WHEELING, IL- Ellen Steinbrecher and CJ Kuehl, both principals with Lee & Associates of Illinois LLC represented National Louis University in its lease of 11,199 square feet of office space in the Capitol Commerce Center here. Jason Streepy with NAI Hiffman represented building ownership in the transaction.

ROMEOVILLE, IL- Distribution 2000 Inc., a third-party public warehouse and distribution firm offering food grade storage, has leased 236,000 square feet at 1165 Crossroads Parkway here. The new lease is a relocation and consolidation from two locations, with an increase in total square footage by 61,000 square feet. Sally Macoicz, a senior director with Cushman & Wakefield of Illinois Inc., represented the tenant in the five-year lease. Dan Leahy and Adam Roth with NAI Hiffman represented the landlord, TA Associates. The 471,500-square-foot industrial warehouse building was built in 2004.

Posted by NAI Hiffman | Filed Under Industrial, Office

U.S. Cellular leases space at former HSBC complex

January 6, 2012

As seen in Chicago Real Estate Daily

By: Dave Matthews January 06, 2012

(Crain’s) — U.S. Cellular Corp. leased 40,000 square feet in a vacant former HSBC PLC complex, a small boost for the office market near O’Hare International Airport that is still hurting from the recession.

The cell phone service provider signed a four-year lease in the Oakwood Commerce Centre, a 238,202-square-foot development fully occupied by HSBC until June, when the North American unit of the financial services giant vacated the property.

Built in 1985, the complex is along North Wood Dale Road between Thorndale and Foster avenues in Wood Dale, just west of O’Hare.

“We want to do what HSBC did before: We’re going to be a high-density, processing, call center-type building,” says Jack Reardon, a senior vice-president with real estate firm NAI Hiffman, which handles Oakwood’s leasing. “In a challenging market, we just got our first deal done.”

In the slow suburban office market, even small deals are coveted.

“There has not been a lot of velocity in the market . . . although we’re starting to see that change,” says Mark Hamilton, a partner in Itasca-based developer Hamilton Partners, which attempted to lure U.S. Cellular to its Meadows Office Park in west suburban Addison.

“With big companies, there’s always kind of a chance they stay longer than they say they will,” Mr. Hamilton notes.

The four-building Oakwood complex is owned by Hartford, Conn.-based UBS Realty Investors LLC, which paid about $51.5 million for the buildings in 2001, property records show.

UBS had no debt on Oakwood and can afford to be patient as it leases up the property, Mr. Reardon says.

“There’s no clock ticking,” he says.

In a cost-cutting move, London-based HSBC in 2008 consolidated five suburban offices into a 540,000-square-foot complex in north suburban Mettawa developed by Hamilton Partners.

U.S. Cellular plans to use the complex to house vendors working on a “long-term project” that the Chicago-based company declines to identify, a spokesman says in an email.

“We made the strategic business decision to relocate some of their associates to be closer to our (information systems center in Bensenville) and (Chicago) regional headquarters,” he says.

Posted by NAI Hiffman | Filed Under Industrial

Distribution 2000 relocates to Romeoville

January 4, 2012

As seen in RE Journals

Distribution 2000 Inc., a third-party public warehouse and distribution firm offering food grade storage, has leased 236,000 square feet at 1165 Crossroads Parkway in Romeoville.

The new lease is a relocation and consolidation from two locations, which increases the firm’s total square footage by 61,000 square feet. Sally Macoicz, a senior director of Cushman & Wakefield of Illinois Inc., represented Distribution 2000 in the five-year lease. Dan Leahy and Adam Roth of NAI Hiffman represented the landlord, TA Associates.ds Parkway in Romeoville.

The one-story, 471,500-square-foot industrial warehouse building was built in 2004. It has a 30-foot clear ceiling height, 48 exterior docks and two drive-in doors. The building is located one-half mile from the interchange at Interstate 55 and Weber Road and has good visibly from the highway.

Distribution 2000 is an asset-based, third-party logistics provider offering warehousing and distribution services in the Chicago metropolitan area.

Posted by NAI Hiffman | Filed Under Industrial

Is the O’Hare Market Ready for Take-off?

December 20, 2011

As seen in RE Journals
By Adam Marshall
NAI Hiffman Industrial Services Group

Chicago’s O’Hare industrial market houses a diverse mix of distribution and manufacturing companies in one of the largest concentrations of industrial property in the Midwest. Surrounding O’Hare International Airport, the O’Hare industrial market is comprised of Elk Grove Village, Des Plaines, Rosemont, Franklin Park, Bensenville, Wood Dale and Itasca. During the economic downturn, this market suffered greatly and still shows signs of high vacancy rates, historically low rental rates and sale prices. What signs can we look for to forecast the future of the O’Hare industrial market?

It is hard to find consistent and clear data to predict future trends, but two good sources of local information provide an insight into this market. First, the Chicago Department of Aviation collects monthly air cargo volume figures based on freight tonnage at O’Hare International Airport. Second, the Federal Reserve Bank of Chicago tracks Midwest manufacturing output in Illinois, Indiana, Iowa, Michigan and Wisconsin. Reviewing these two indicators tells a great story of where this market has been and where it is going.

In the heart of this market, air cargo volume at O’Hare can be used as a leading indicator for distribution space demand in this area. Using a regression model on O’Hare air cargo tonnage and the O’Hare industrial vacancy rate over the past ten years, the effect of cargo tonnage is statistically significant and negative. This means when air cargo tonnage increases or decreases, there will most likely be a lagging opposite effect on vacancy rate. As an example, in 2009 we experienced the lowest cargo volume recorded over the past ten years and a 14% decrease from 2008. The vacancy rate in the first quarter of 2009 was 11.22%. It increased to its highest reading in the past 10 years to 12.59% in the first quarter of 2010 representing a 12% increase in the vacancy rate within 12 months. We soon witnessed the opposite effect with a dramatic 24% increase in cargo tonnage during 2010 which paralleled a 7% drop in the vacancy rate from the first quarter of 2010 to the first quarter of 2011. Currently cargo tonnage through the third quarter of 2011 has decreased slightly by approximately 4% versus the same period in 2010 with a corresponding 10.8% vacancy rate.

The importance of air cargo distribution in the O’Hare market is exemplified by a few recent deals. The largest transactions in the market this year were logistics companies leasing modern distribution space. CEVA Logistics leased 232,000 square feet and Hegele Logistics leased 207,000 square feet in the 439,000 square foot ProLogis owned building at 855 N. Wood Dale Rd in Wood Dale. Companies like these that rely on expediting time sensitive products through O’Hare Airport drive much of the space demand in this market.

The volatility of 2009 and 2010 is behind us. We now see a stabilization of air cargo volume at O’Hare over the past twelve months. With no new speculative property development in this market, we should see demand continue to slowly reduce current vacancy rates.

Another pulse to watch in this market is the Chicago Federal Reserve Midwest Manufacturing Index. While broad in its scope of coverage across the Midwest, it uses “hours worked” data to measure monthly changes in regional manufacturing activity. The height of this index achieved a reading of 101.3 in January of 2008. The lowest point recorded a 68.3 in June of 2009, representing a 33% decrease from the peak. The September 2011 index was 85.2 which is a 25% recovery from the bottom in 2009. This reading is also the highest level in three years since posting an 86.5 in October 2008. The current index is only down 7% from the 10 year average of 91.3 although it has remained relatively flat over the past six months.

The Chicago Federal Reserve Midwest Manufacturing Index is not a leading indicator for industrial demand in O’Hare. However, it is a general gauge for local production which directly impacts the supply chain and movement of goods through this area. While our economy shifts towards distribution, manufacturing is still dominant in the O’Hare market. One of the largest manufacturing deals in O’Hare this year was the relocation of Toyo Ink America to 108,000 SF at 1225 N. Michael Drive in Wood Dale which doubled their capacity.

Relative to the air cargo volumes at O’Hare, the Chicago Federal Reserve Midwest Manufacturing Index corresponds to the variability seen over the past couple of years. Keep a watchful eye on these important statistics as they will likely determine future demand in the O’Hare industrial market. While both data sources show improvement from the bottoming out of these indexes in 2009, neither set indicates substantial growth in the near future. The stabilization in these latest figures should allow for a slow but smooth take-off to recovery in the O’Hare market.

Follow these statistics at www.ChicagoIndustrialist.com

Adam Marshall, CCIM, is an industrial real estate broker at NAI Hiffman and specializes in the O’Hare and surrounding markets.

Posted by NAI Hiffman | Filed Under Adam Marshall, Industrial

« Previous Page — Next Page »