The building is in the north O'Hare submarket, where vacancy rates are around 8%, says Ken Szady, executive director of Cushman & Wakefield's capital markets group. Szady along with Jim Carpenter, senior director with Cushman & Wakefield's capital markets group, acted as sole brokers in the sale.
"Colony is currently adding to its portfolio in Chicago, looking for a nice, diversified portfolio in the market, and this represents a large chunk of industrial real estate in an infill market," Szady tells GlobeSt.com. "There's not a lot to come on the market of this scale. When you start looking at the number of large, big-box distribution facilities that are located around the airport, that number is small."
The building has long-term leases, says to Szady. Tenants include Bosch, the supplier of technology and services, which occupies 193,000 sf, and integrated communications technology provider Rauland Borg, which occupies 270,000 sf. Another 175,000 sf remains vacant, with asking lease rates around $4.50, net, Szady says.
"Colony can create some value in the market by leasing it up," Szady says. "With the volatility of the stock market, there's a return to assets like real estate. It's a good, solid return."
Wilton, CT-based Commonfund and Chicago-based Golub purchased the building vacant in the '90s, renovated it and subdivided it into three units, Szady says. Bosch has occupied the building for about seven years, and has another five remaining on its lease. Rauland Borg only recently signed its 15-year lease in the building, to begin occupying its space in December.
The building was on the market about 45 days, Szady says, during which Cushman & Wakefield received about 10 offers for the property. "The ownership decided to select Colony because they felt there was a good relationship there," Szady says. "There was a good intent to buy the building and get the deal closed."
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