“We've got very sticky tenants who've been in these buildings for a very long time,” Foster says. Manufacturing Solutions, for example, runs a 24/7 operation in its Portage building and “they are very, very entrenched in that facility.”

Foster compares the portfolio to the 1,552,475-square-foot Dart Container/Solo Cup National Distribution Center in suburban University Park, which, as reported in GlobeSt.com, he helped sell earlier this year to CPA®:18 – Global, a non-traded REIT affiliate of W. P. Carey Inc., for $85 million. Although the Dart building is considerably larger, it is also a very modern space and in the same submarket as several of the properties in the new portfolio. The Dart building sparked global interest, and the sale price of nearly $55-per-square foot showed that demand for the best distribution product in Chicago is approaching pre-recession levels.

Although the region has begun to see some new construction, Foster does not believe developers are active enough to meet the high level of demand. “We are experiencing an annual rate of construction, spec and build-to-suit, of about 160-million-square-feet, but in 2007 we were up to 250 million. This is why you are seeing healthy rent growth and absorption.”

All of these factors have pushed down cap rates, which, for recently-traded, modern core properties usually hover in the mid-5s, he adds. And for this new portfolio, “that may be the level we're talking about.”