This Week's Chicago Deal Sheet
The world’s top cold storage provider expanded its reach in Chicagoland. Lineage Logistics bought a three-property portfolio totaling 712K SF from global investment manager Investcorp, adding to its roughly 275 facilities in Europe, North America and Asia.
The portfolio consists of 2635 South Western Ave. in Chicago, 8424 West 47th St. in southwest suburban Lyons and 1544-46 Hecht Drive in northwest suburban Bartlett. It is 100% leased to 11 tenants and features clear heights up to 48 feet. The price was undisclosed, but Crain’s Chicago Business reported it was more than $100M.
The growth of online grocery sales is fueling the cold storage sector’s growth and attracting the interest of investors. A 2019 CBRE forecast said U.S. cold storage developers will need to add up to 100M SF through 2022 to meet the demand.
Founded in Michigan in 2012, Lineage Logistics quickly grew into a giant. Its more than $1B purchase of Preferred Freezer Services in 2019 made it the nation’s largest cold storage firm, according to The Wall Street Journal. The company also just completed the $900M purchase of Emergent Cold, marking its entrance to the Australia and New Zealand markets.
A JLL team led by John Huguenard and Ed Halaburt, along with Sean Devaney, Kurt Sarbaugh and Robin Stolberg, marketed the portfolio for Investcorp.
“What is unique about this cold storage portfolio is that it is a multi-tenant portfolio with fewer than four years of average remaining lease term that was able to close in spite of uncertainty caused by the COVID-19 pandemic,” Halaburt said.
EXECS
Bellwether Enterprise Real Estate Capital, a subsidiary of Enterprise Community Investment, hired Dan Rosenberg as a senior vice president and Ryan Morris and Matt Terpstra as assistant vice presidents. Rosenberg, a 15-year Chicago commercial real estate veteran, joins Bellwether Enterprise from Cohen Financial.
LEASES
Sterling Bay signed a lease with Studio Three, a boutique fitness operator, for about 10K SF at 333 North Green St., its new mixed-use development in Chicago’s Fulton Market neighborhood. Studio Three plans to open in Q1 2021. The Chicago-based business also operates studios in Lincoln Park and River North. Sterling Bay completed construction on the 555K SF, 19-story building in December and has leased 87% of its space. The developer will also relocate its corporate headquarters to 333 North Green St. later this summer.
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MidAmerica Printing Systems signed a lease with Brennan Investment Group for 30K SF at 3838 River Road in Schiller Park. The company will move from its 25K SF at 1716 West Grand Ave. in Chicago to Schiller Park in July. Colliers International | Chicago’s Tom Rodeno and Matthew Stauber represented MidAmerica Printing Systems.
SALES
Dermody Properties acquired a 596K SF logistics building at 1501 Harris Road in north suburban Libertyville. The building was constructed in 2007 on a 35-acre property near I-94 at the intersection of Peterson and Midlothian roads in Lake County. The property is occupied but will be available by Q1 2021. Keith Puritz, Brett Kroner and Eric Fischer of Cushman & Wakefield will represent Dermody Properties in re-leasing the project.
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A 14-building, 249-unit affordable housing portfolio in Gary, Indiana, traded hands for $10.3M. Affordable Housing Investment Brokerage’s Kyle Shoemaker represented the purchaser and the seller, both private investors. All 14 buildings are within a 1-mile radius.
FINANCING
Associated Bank completed a $10.5M construction loan for WRP New Berlin II to build a 193K SF distribution center near the intersection of West Small and Moorland Roads in New Berlin, Wisconsin. The developers plan to complete the project by fall 2021. Associated Bank’s Edward Notz managed the loan and closing.
CONSTRUCTION & DEVELOPMENT
Chicago-based Ascend Real Estate Group and its sales and marketing firm, @properties Developer Services, delivered the first residences at Superior House, a new 12-story condominium building in Chicago’s River North neighborhood. The 33-unit 366 West Superior St. is 70% sold, company officials say. A number of residences are available immediately, with prices ranging between $1.8M and $2.4M. Chicago-based FitzGerald Associates Architects designed Superior House.
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HSA Commercial Real Estate started construction on the first phase of the 68-acre Bristol Highlands Commerce Center at Wilmot Road and 136th Avenue in Bristol, Wisconsin, near I-94 and the Wisconsin-Illinois border. Site work and mass grading are underway, and the developers expect several spec buildings to go vertical later in June. HSA plans to deliver a 157K SF warehouse building and a 472K SF distribution center in Q4.
Cushman & Wakefield’s Jeff Hoffman and Chad Vande Zande out of Milwaukee and Chicago-based Eric Fischer are marketing the buildings for lease. A remaining 25-acre parcel can accommodate up to a 450K SF building. Premier Design + Build Group serves as general contractor, while Partners in Design Architects did the project design and Pinnacle Engineering manages civil engineering.
THIS & THAT
The direct vacancy rate of the downtown’s top 30 office buildings sank from 10.4% in the fourth quarter of 2019 to 6.9% by the second quarter of 2020, according MBRE. The study includes the last 30 Class-A buildings greater than 300K SF constructed in the city's central business district. Company officials attribute the decrease to the addition of the 555K SF 333 North Green St. to the list and the removal of 311 South Wacker Drive, a 1.3M SF building.
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Back Nine Apartment Investors launched its next multifamily investment fund. The Chicago-based, majority-woman-owned business set a $50M fund target and will focus on attracting family offices, small endowments and high net worth individuals. The principals have sponsored more than 5,000 apartment units across the country.
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Rhombus Systems formed a partnership with CA Ventures to provide a cloud-based video security platform for its multifamily and student housing communities. Officials from the Chicago-based CA Ventures say the new partnership will allow them to standardize security and streamline operations.
