CHICAGO—The market for the smaller and older industrial properties that populate much of suburban Chicago has improved enough that investors will even seek out buildings with high vacancy rates. Value Industrial Partners, a Chicago-area property owner which specializes in this class of industrial buildings, recently closed the purchase of a 33,332-square-foot multi-tenant building located at 2201-2207 Lively Boulevard in Elk Grove Village that was only 25% leased at the time of purchase.
Theresa Gleason of Paine Wetzel represented the seller, a private owner, and VIP was represented by Brian Liston and Director of Leasing Brian Gedvilas. The exact terms of the deal were not disclosed.
Earlier this year, the company picked up a distressed asset at 744-777 Edgewood Ave. in nearby Wood Dale. That 40,000-square-foot multi-tenant building was only 40% leased at the time of sale, but VIP quickly signed another tenant to put it over 50%.
The new owners of the Lively building faced an even greater challenge since it was only 25% leased at the time of purchase. However, VIP just entered into long-term leases for two of the vacant units and brought the occupancy up to 75%. They have also just begun several improvements to the building including replacement of the parking lot, driveways, dock wells; upgraded interior and exterior lighting; improved landscaping and several interior improvements.
In August, GlobeSt.com reported that investment in Chicago-area industrial property was picking up, especially among older class B properties.
VIP now owns and manages over 3.7 million square feet of industrial buildings throughout the Chicago area. In May, GlobeSt.com reported that the company had refinanced a large group of their holdings, locking in low, long-term rates. The 23 refinanced properties have over 90 tenants and a total of about 900,000-square-feet. The viability of these properties “pretty much mirrors the local economy,” said Jeff Cherner, senior vice president of NorthMarq, which helped arrange the refinancing. “As the economy continues to improve, then the companies that occupy these types of buildings should grow,” making the buildings more attractive to investors.
And Gedvilas said earlier this summer that the suburban industrial market is “improving and stabilizing. In some areas we're back to where we were in 2006 and 2007.”
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
