Middle Market Digest-The Midwest

BY THE NUMBERS

CHICAGO—Projected rents are more than adequate in many markets to justify additional development of warehouses and distribution centers, with Chicago positioned as a top market for this activity according to a new report from CBRE. The company analyzed the gap between pro forma rents in various markets – the rental rates that developers can reasonably expect to obtain on newly built warehouses – and breakeven rents, which are the rents they’d need to cover overall development costs. In the 10 major markets that CBRE examined, the former exceeded the latter by 20 to 40%. CBRE’s analysis found the largest rent spreads in Chicago (43%), Atlanta (38%), Phoenix (35%), Pennsylvania’s I-78/I-81 corridor (30%) and Los Angeles (27%). “Chicago continues to see a huge demand for distribution space, particularly along proven logistics corridors,” says Whit Heitman, senior vice president with CBRE. “With the number of tenants active in the market, demand is still not being met by the current construction pipeline.”

NEWS & NOTABLES

MINNEAPOLIS—JLL’s Capital Markets has expanded its multifamily services in the Midwest with the addition of Mox Gunderson, Dan Linnell and Josh Talberg to the firm’s Minneapolis office. Together, and supported by a team of analysts and associates, the three come from a leading commercial real estate firm and specialize in investment sales of multifamily and student housing assets. Gunderson, Linnell and Talberg join as senior vice presidents. The trio will report to Keith Largay, managing director, and will work closely with Chicago-based multifamily team members Liz Gagliardi and Chuck Johanns. “With 25 years of combined experience in commercial real estate, Mox, Dan and Josh head one of the most dynamic multifamily groups in the upper Midwest,” says David Williams, head of JLL Capital Markets, Multifamily. “They are an excellent addition to our national platform of over 200 professionals, who last year collaborated to sell or finance almost $20 billion in over 620 transactions.”

CHICAGO—Industry veteran Bruce Hopple has joined Avison Young’s Chicago office as a senior vice president. He will join the office tenant representation team, focusing on new business development and transaction advisory services for professional service firms, not-for-profits and local and national corporations. With more than 25 years of commercial real estate experience Hopple is an expert in financial and market analysis, lease negotiations and commercial real estate trends. Hopple was most recently a senior director with Cushman & Wakefield in Chicago. “We have known him for many years as a strong brokerage professional who has held various positions within the commercial real estate industry,” says Danny Nikitas, Avison Young principal and managing director of the firm’s Chicago office. A consistent top producer Hopple has represented such notable clients as the American Board of Medical Specialties; the Chicago Stock Exchange; CPG International; Gibbs & Soell; and Zurich Insurance.

DEALTRACKER

BETTENDORF, IA—The Boulder Group, a net leased investment brokerage firm, has completed the sale of a single tenant net leased Walgreens property located at 830 Middle Rd. in Bettendorf, IA, for $4,675,000. The 14,490 square foot Walgreens is at the intersection of Middle Rd. and Kimberly Rd. The property is located near a number of national retailers such as Home Depot, Hobby Lobby, Hilton Garden Inn, Schnucks and numerous quick service restaurants. There are over 75,239 people living within a three-mile radius of the property with an average annual household income in excess of $56,704. A Midwest based 1031 investor was the buyer and the seller was a Northeast based real estate fund. “Walgreens drug store properties with proven operating histories continue to garner significant investor interest,” says Randy Blankstein, president of the Boulder Group. John Feeney, senior vice president of Boulder, adds, “properties with strong real estate fundamentals continue to be in demand with all investor classes.”

INDIANAPOLIS—Thompson Thrift Retail Group is currently working with Dunn Hospitality Group to bring the dual branded – Hyatt Place and Hyatt House, to The Yard at Fishers District. The project will incorporate the two different hotels within a single six-story building of 211 rooms. “We had been analyzing various sites throughout the Indianapolis metro area for some time and were drawn to 116th St. due to the announced projects including Top Golf and IKEA and its close proximity to numerous other demand generators,” says David Dunn, president and chief operating officer for Dunn. “Once we became aware of Thompson Thrift’s development plans, we instantly recognized the opportunity and moved quickly. We feel fortunate to have been selected as their exclusive hospitality partner with this project.” He anticipates completing the hotel in 15 months after the start of construction.

CHICAGO—Officials from Cohen Financial, a division of SunTrust Bank say Dan Rosenberg, managing director, and Matt Terpstra, vice president in the Chicago office, secured at total of $110 million for the acquisition of Schaumburg Towers. The two 21-story towers feature 882,071 square-feet of class A office space located at 1400 and 1450 American Ln. in Schaumburg, IL, a northwest suburb of Chicago. As reported in GlobeSt.com, the borrower is American Landmark Properties, a Skokie, IL-based real estate investor and longtime Cohen Financial client. Cohen secured the $110 million loan from a dual partnership of lenders, including Prime Finance Partners, a national commercial real estate finance company, and Pearlmark Real Estate Partners, a Chicago-based real estate investor and manager. Cohen Financial partnered with Steve Roth of CBRE to secure the financing, which closed on June 1. American Landmark Properties will utilize the financing to acquire Schaumburg Towers, complete capital improvements and to expand tenancy.