CHICAGO, MILWAUKEE—Investors who have grown wary of the sinking returns found among industrial properties in the nation's core markets now have another opportunity to buy up product in Milwaukee, a market with a 5% vacancy rate. The Zilber Property Group has awarded the exclusive sale listing for a five-building, 191,000 square foot industrial portfolio near Milwaukee General Mitchell Airport to Avison Young's industrial capital markets team in Chicago, led by Erik Foster and Mike Wilson.
The airport location means that “these are going to be very, very desirable assets for a number of different buyers,” Foster tells GlobeSt.com, due to its “strong potential for rent growth.” Foster and Wilson have extensive experience selling industrial portfolios in the Milwaukee market, including two portfolio sales totaling 3.5 million square feet in the airport industrial corridor.
For example, as reported in GlobeSt.com, earlier this year CenterPoint Properties Trust sold a 1.7 million square foot industrial portfolio with properties in the Milwaukee area and in the Southeast Wisconsin submarket to Dallas-based Westmount Realty Capital LLC. It wasone of the largest portfolio sales in the Midwest in recent years.
“The secondary markets have greater opportunities for investors that can't afford to buy properties in Chicago, New Jersey or California,” Foster adds. Like Milwaukee, other industrial markets such as Nashville, Memphis and Cincinnati have also seen plunging vacancy rates and have generated interest from institutional investors who want to avoid the intense competition from other potential buyers. "It's happening all over the country.”
The buildings up for sale in Milwaukee include:
· 315 W. Edgerton Ave., 63,654 square feet
· 4930 S. 2nd St., 51,721 square feet
· 4960 S. 2nd St., 19,287 square feet
· 4965 S. Howell Ave., 32,200 square feet
· 4903 – 4907 Howell Ave., 24,096 square feet
The buildings were developed in the 1980s, Foster says, which is typical for urban infill industrial properties, and tenants occupy about 85% of the space. Among the national tenants that occupy this portfolio are Enterprise Rental Car and Xerox.
Another selling point for this portfolio is the submarket's high barriers to new development. Land scarcity should thwart new competition “because this area is surrounded by urban residential, the highways and the airport.”
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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.
