The Chicago market has now seen 27 consecutive quarters of growth. Tenants absorbed another 7.1 million square feet of space in the last quarter, pushing the vacancy rate down 30 bps to 7.6%, the lowest in ten years, according to a year-end report from Newmark Grubb Knight Frank. That brought positive net absorption for 2016 up to 15.3 million square feet, close to the 15.6 million square feet absorbed in 2015.

Tenants now occupy about 85% of Brennan's new portfolio, according to Kevin Brennan, vice president of acquisitions. The firm plans to improve the portfolio from an aesthetic perspective, and then boost both its occupancy rate and amount of rental income. He estimates that at some buildings Brennan can increase value by around 20%. And the group's local expertise and ability to provide close attention to these tenants will help achieve those goals. “Our office is within 20 minutes of almost every property in the portfolio.”

CHICAGO—Brennan Investment Group, LLC recently completed the acquisition of a 30-building industrial portfolio spread across the Chicago region. The Rosemont, IL-based firm specializes in value add industrial properties, and this portfolio, which totals more than two million square feet, is mostly class B and located primarily in the O'Hare, Near North, and Central DuPage submarkets.

It's a great time to buy industrial property in the Chicago region. The occupancy rate now hovers at a historic low, making local tenants eager to snap up available spaces. In addition, these buildings sit within infill areas, such as Schiller Park, Elk Grove Village, Niles, Itasca, and Des Plaines, where developers have few options to build new product.

“This is one of the tightest markets that Chicago has ever seen,” Michael Brennan, the company's chairman and managing principal, tells GlobeSt.com. “And these are the top locations in Chicago's best submarkets. They are the functional equivalent of A properties, yet we can buy them for one-third the price, and pass on a significant economic benefit to our tenants. We have provided within the project cost a sufficient amount of capital to meet their growing needs.”

The firm's agreement for this latest acquisition prohibits the disclosure of the price paid. But it's not the first time the firm has placed a big bet on the local market in class B buildings. As reported in GlobeSt.com, two years ago it acquired for $164 million a similar set of 23 properties. The company now owns about 11 million square feet of space in the metro area, making it one of the region's largest landlords, and more than 27 million square feet in 23 states.

The Chicago market has now seen 27 consecutive quarters of growth. Tenants absorbed another 7.1 million square feet of space in the last quarter, pushing the vacancy rate down 30 bps to 7.6%, the lowest in ten years, according to a year-end report from Newmark Grubb Knight Frank. That brought positive net absorption for 2016 up to 15.3 million square feet, close to the 15.6 million square feet absorbed in 2015.

Tenants now occupy about 85% of Brennan's new portfolio, according to Kevin Brennan, vice president of acquisitions. The firm plans to improve the portfolio from an aesthetic perspective, and then boost both its occupancy rate and amount of rental income. He estimates that at some buildings Brennan can increase value by around 20%. And the group's local expertise and ability to provide close attention to these tenants will help achieve those goals. “Our office is within 20 minutes of almost every property in the portfolio.”