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ROSEMONT, IL-Liberty Property Trust, based in Malvern, PA, has partnered with New York State Common Retirement Fund to enhance the value of its Chicago-area industrial portfolio, assessed at $125 million. Through development, acquisition and redevelopment of underutilized distribution properties, Liberty's Midwest bank is expected to grow to approximately $500 million.
Advised by Chicago-based real estate investment management firm Heitman, the agreement includes seven Liberty-owned distribution buildings in the Chicago area. Occupancy of the portfolio stands at approximately 83%. Through the joint venture, Liberty will retain 25% ownership and will receive development, leasing and property management fees. The venture will be financed with approximately 60% leverage.
Totaling 2.15 million sf and 100 acres of developable land, Liberty Properties' assets in the partnership include: The 607,752-sf Liberty Business Center, 901 Bilter Rd., Aurora; the 694,367-sf Liberty Business Center, 1000 Bilter Rd., Aurora; 2453 Prospect Dr., Aurora, totaling 210,910 sf; 101-121 N. Raddant Rd., Batavia, measuring 274,400 sf; 1070 Swanson Dr. and 506-530 Kingsland Dr., totaling 285,090 sf; and 900 Douglas Rd, measuring 76,074 sf. The land, located at Liberty Business Center, can accommodate approximately 1.5 million sf of additional industrial development.
Don Schoenheider, vice president and city manager with Liberty Property, tells GlobeSt.com that the joint venture will allow the company to gain further reach within a shorter time span. "Chicago is a highly competitive market," Schoenheider says. "We've been here for two years, so it made sense to do something to speed our growth."
Liberty entered the suburban Chicago industrial market in 2004 with the acquisition of five buildings in Batavia and Aurora as well as the land at Liberty Business Park. In early 2005, the developer broke ground on 901 Bilter Rd., its first speculative development in the region.
Schoenheider tells GlobeSt.com that while the joint venture does not have a specific date set to reach its acquisition goal, "the major players have north of 10 million sf, and we want to meet that soon than later." With most of its assets in Chicago's west suburbs, Schoenheider says the company will be looking in the south, southwest, O'Hare and infill markets. "We'll pretty much be looking everywhere," he says, "because now we've got the ability to do any and all of that."
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