Middle Market Digest-The Midwest

BY THE NUMBERS

CHICAGO—Encouraged by positive job projections, developers of self-storage space should complete about 1.2 million square feet of space during 2018, according to a new forecast from Marcus & Millichap. Most will be in the city of Chicago, including the 270,000-square-foot CubeSmart Self Storage near Guaranteed Rate Field. The company expects demand for storage space will match this year’s delivery volume and maintain the metro’s vacancy rate at 8.5% after compressing by 20 to 40 bps in each of the past three years. But steady absorption will not translate into rent growth. Instead, the metro’s average rent will decline nominally for a second straight year.

NEWS & NOTABLES

CHICAGO—Cushman & Wakefield recently named Nathaniel Robinson as global chief investment officer and executive vice president of strategic planning. Robinson will shape the firm’s broader business strategy and will allocate investment capital across the company. In this global role, the Chicago-based Robinson will work closely with chief executive officer Brett White. “Nate is an exceptional leader who possesses a unique blend of financial and analytical skills along with a strong background advising, operating, and investing across a variety of companies,” says White. “This new role is critical to our firm, and allows us to make smart, strategic decisions as we partner and invest to develop new innovative solutions that respond to emerging industry trends and client requirements.” Before joining Cushman & Wakefield in 2016, Robinson was an investment partner at Virgo Capital, and prior to that, he worked in Morgan Stanley’s global technology group.

DEALTRACKER

DUBUQUE, IA—Holliday Fenoglio Fowler, LP recently helped complete the sale and acquisition financing for Warren Plaza, a 96,310-square-foot, grocery-anchored shopping center in Dubuque, IA. The HFF team marketed the property for the seller, New York City-based Brixmor Property Group. The DESCO Group purchased the asset. Additionally, the HFF team arranged a fixed-rate loan to finance the acquisition. Anchored by a Hy-Vee grocery store, the 90.5%-leased Warren Plaza is shadow-anchored by the only Target within 75 miles. Situated on 13.33 acres at 3500 Dodge St., Warren Plaza is located along the highly trafficked US Hwy. 20 retail corridor. The HFF investment advisory team representing the seller included senior directors Amy Sands and Clinton Mitchell along with managing director Jules Sherwood, a licensed IA real estate broker. The HFF debt placement team included director Christopher Knight.

CHICAGO—Lagestee-Mulder just acquired a 47,000-square-foot flex building located at 1600 Shore Rd. in Naperville, IL, a western suburb of Chicago. The multi-tenant, fully-leased building is located on a 4.3-acre site and features a 138-car parking lot. The recently renovated property was purchased by the company’s new investment fund, LM Value Investors II, LLC. This is the second asset and the first flex building purchased for the LM funds. “This purchase is a continuation of our focus on well located assets in strong suburban markets with strong in-place cash flow and at a price well below replacement cost, giving us the ability to create value for our investors,” says Don Price, senior vice president and chief investment officer for Lagestee Mulder. The seller, Midwest Industrial Funds, was represented by NAI Hiffman’s John Whitehead and Adam Johnson.

CHICAGO—CBRE recently completed the sale of 314 W. Institute Pl., a 22,424-square-foot office property in Chicago’s River North neighborhood for $3.8 million to Chicago-based Elmdale Partners. Keely Polczynski of CBRE represented ownership in the deal. The property offers floor-to-ceiling windows, brick and timber features, and other qualities popular with technology firms. In 2017, River North accounted for 38% of all leases from tech firms in Chicago, up from 17% in 2014, according to CBRE. It is also Chicago’s tightest office market, with an overall vacancy of 5.8%, and asking rents averaging $42.70 as of the first quarter, well above the market average of $39.41. “This was an amazing opportunity to own a quality asset in Chicago’s hottest office market,” says Polczynski. “The new owners will be able to strategically reposition the property and take advantage of the incredible market demand in River North.”

CHICAGO—Waypoint Residential, a real estate investment firm focused on the US rental housing sector, has expanded its presence in the Midwest region with the acquisition of three conventional multifamily properties and one student housing property: Legacy at Poplar Creek, a 196-unit garden-style apartment community located in Schaumburg, IL; Two Itasca Place, a 70-unit class A property located in Itasca, IL; The Attleigh, a 184-unit garden-style apartment community in Columbus, OH; and Rockland West, a 500-bed purpose-built student housing property serving the University of Kansas in Lawrence. The firm’s Midwest exposure now includes nearly 1,000 units across IL, OH, OK and KS. “The Midwest presents compelling investment opportunities that align well with our overall conservative investment philosophy,” says Scott Lawlor, chief executive officer, Waypoint Residential. “Waypoint’s commitment to the region is part of an overall strategic plan to expand our footprint across the US.” Mike Hung, vice president, leads Waypoint’s student housing acquisition activities.

MINNEAPOLIS—The Twin Cities office of Duke Realty Corp. has executed a long-term lease agreement for a 277,222-square-foot office/manufacturing/warehouse build-to-suit with ILLUME, a Minneapolis-based company that designs, develops and produces candles and accessories for fragrance, bath and body, and home fashion industries. Starting in the second quarter, the company will construct the building on 12.65 acres at the southwest corner of the intersection of Elm Creek Blvd. North and Revere Ln. in Maple Grove and complete it in the first quarter of 2019. “This building will be state-of-the-art and incorporate modern features that will help facilitate ILLUME’s consolidation of multiple locations and operational advancements,” says Josh Budish, vice president of Duke Realty’s Minneapolis-St. Paul operations. “In addition, the site’s rare combination of location and amenities will provide ILLUME with the opportunity to attract new employees to accommodate its planned growth.” Bill Ritter with Colliers International represented ILLUME in the transaction, while Duke was represented by Dan Swartz with CBRE and Budish.

BUILDING BLOCKS

NAPERVILLE, IL—Capitol Seniors Housing, a leading senior living investment and development firm, has opened a new assisted living and memory care community – Arbor Terrace Naperville – in Naperville, near Chicago. The $27 million, 74,256-square-foot community has 95 residential suites. Arbor Terrace Naperville is located at 2920 Leverenz Rd. in the Cantore Place development just north and east of Rte. 59 and 95th St. “Capitol Seniors Housing and The Arbor Co. are proud to offer a new, state-of-the-art senior living community to seniors and their families in the Naperville area,” says Scott Stewart, managing partner of Capitol Seniors Housing. “Naperville has a stellar reputation for quality of life, a beautiful historic district and river walk, and many other amenities including a top-ranked library system. Naperville Arbor Terrace is the newest of many wonderful assets in an incredible community that has many times been rated among the very best cities in the United States to live and retire.”

CHICAGO—Loukas Development has just topped off the concrete construction of The Van Buren, a 12-story boutique mixed-use development at Van Buren Ave. and Halsted St. in Chicago’s West Loop. Now that this development milestone has been achieved, leasing of the building’s 148 apartment units will begin in mid-April. “As the West Loop continues to attract top name office tenants, we’re seeing a strong demand for housing that can support the expanding employee base,” says Aristithis Loukas, managing director of Loukas Development. “The Van Buren was designed to fill a niche by delivering a unique boutique residential experience that ties in with the revitalization occurring throughout the West Loop.”