This Week's Chicago Deal Sheet
Ashley Capital started construction on a new speculative 397K SF industrial building at 11101 Enterprise Way in Sturtevant, Wisconsin. This will be the third building constructed at the firm’s Enterprise Business Park, and it’s just one of the many spec projects recently launched in Southeast Wisconsin as developers take advantage of the growing demand for space from e-commerce, food and logistics companies looking to serve both the Chicago and Milwaukee metro areas.
“Several years ago, we acquired 90 acres of farmland along I-94 between Chicago and Milwaukee,” Ashley Capital Vice President Gary Rosecrans said. “The first building we constructed is a 376K SF speculative distribution building. The second building we built is a 438K SF speculative distribution building. It is finished and occupied by Amazon. This was a catalytic project that resulted in the construction of our next speculative warehouse building, which will be completed in December 2020 and is now available for pre-leasing.”
Enterprise Business Park will have more than 1.3M SF of Class-A industrial space when fully developed, Rosecrans added. The new building will bring Ashley’s industrial property portfolio in Racine County to more than 1.9M SF.
Transaction velocity has been picking up in the submarket, which includes Racine and Kenosha counties.
“Net absorption between January and March totaled 1.3M SF, the greatest quarterly tally in Southeast Wisconsin since the second quarter of 2015,” according to Colliers International.
During the previous seven quarters, developers finished 12 speculative construction projects totaling 3.4M SF, and by the first quarter, those buildings were 62.4% occupied, Colliers added.
John Sharpe and Tom Boyle of Lee & Associates and Terry McMahon and Cody Ziegler of Cushman & Wakefield | Boerke are marketing agents for Ashley’s newest project.
“The local submarket has a large number of industrial space users that continue to do well notwithstanding the current economic environment,” Boyle said. “It is also a magnet for companies in Chicago, Milwaukee and outside the region.”
EXECS
Commercial real estate veterans Rick Goldman and Justin Pathmann launched REthink Owner Solutions, a development and construction management advisory firm. The Highland Park, Illinois-based REthink already has a roster of projects, including a new senior housing project in Mount Prospect that is scheduled to break ground and the renovation of the Highland Park Public Library. Goldman for the last 19 years was an owner of Pacific Construction Services. Pathmann has more than 20 years of construction management experience, and in 2017 his former firm, Pathmann Construction Management, merged with Pacific Construction Services.
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Ryan Cos. US Inc. promoted Robert Wehner to vice president of pre-construction in its Chicago office. Wehner, who joined Ryan Cos. in 2004, will now lead pre-construction for the company’s Great Lakes region, which includes Illinois, Wisconsin, Michigan, Ohio and Indiana.
SALES
An affiliate of New York City-based investment firm KKR bought Amazon’s 1.5M SF fulfillment center in Kenosha, Wisconsin, for $176M, a new record for an industrial property in the Chicago region, according to a report in the Milwaukee Business Journal. The two-building complex, along with another property in the Charlotte, North Carolina, region, was part of a $260M portfolio deal, according to a press release from KKR. KTR Capital Partners developed the Kenosha buildings in 2013 and 2014 and was acquired by Prologis in 2015. Amazon will keep expanding its Southeast Wisconsin footprint in 2020, including with a 2.5M SF fulfillment center in Oak Creek that will open later this year.
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Chicago-based Karis Cold Storage paid $7.5M for 5115 South Millard Ave., a 42K SF modern freezer building in Chicago’s Brighton Park neighborhood. John Basile of NAI Hiffman represented Karis in the transaction and completed a six-year lease with the sole tenant, Moesle Meat Co., a meat wholesaler. Karis is a newly launched private investment and development company, and this is its first investment in the cold storage sector.
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A private investor paid almost $2.5M for Super 8 Pleasant Prairie, a 60-room hotel at 7601 118th Ave. in Pleasant Prairie, Wisconsin. Ebrahim Valliani, John Yurich, Allan Miller and Chris Gomes of Marcus & Millichap’s Chicago Oak Brook, Austin and Dallas offices marketed the property for the seller, also a private investor. The Marcus & Millichap team also secured and represented the buyer.
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A partnership between Venture One Real Estate and Kovitz Investment Group closed on the acquisition of a 100K SF industrial building at 111 Washington Blvd. in suburban Mundelein. The single-tenant building, constructed in 1973, was 100% leased at acquisition. Cushman & Wakefield’s Marc Samuels represented the seller.
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A private investment group closed on the off-market acquisition of a 23K SF, single-tenant industrial property at 320-350 Industrial Drive in South Elgin. Entre Commercial Realty’s Cory Kay and Mike DeSerto represented the buyer. NAI Hiffman’s Bruce Granger represented the sellers.
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Monument Capital purchased the 192-unit Bartlett Lake Apartments for about $17.8M. Essex Realty Group brokered the sale; it was hired by the court-appointed receiver of Northridge Holdings Ltd. to sell the property after Addison, Illinois-based Northridge, along with several other entities, were accused by the Securities and Exchange Commission of being involved in a Ponzi scheme that included Bartlett Lakes Apartments. Essex’s Doug Imber, Kate Varde, Clay Maxfield and Jaimie Steinher represented the receiver, and their colleagues Brian Kochendorfer and Brian Karmowski represented Monument Capital.
CONSTRUCTION AND DEVELOPMENT
Facebook officials said last Tuesday they will build an $800M data center on 505 acres of Krusinski Construction Co.’s ChicagoWest Business Center in DeKalb, Illinois, about 58 miles west of Chicago. Krusinski will provide the utility infrastructure and roadwork improvements necessary. Facebook will be able to take advantage of a new state tax incentive program exempting new data centers from sales taxes on the wide array of equipment each needs to regularly replace.
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Principle Construction Corp. remodeled and added onto a 408K SF industrial building at 6600 River Road in suburban Hodgkins. Building owner Midwest Industrial Funds hired Principle to remove one side of the existing building and install a new precast panel skin. The Principle team also added an 86K SF truck dock and a 50-car parking lot. Principle’s Mark Augustyn served as principal on the project, with Darrin Dehmlow as senior project manager and Mark Frane as superintendent. Harris Architects designed the remodel and addition.
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Bridge Development Partners partnered with Cabot Properties to acquire 1307 North Lombard Road in west suburban Lombard and develop it into Bridge Point I-355, a 133K SF industrial facility. The partners bought the vacant 7.25-acre site from Location Finders International. Bridge Point I-355 will feature 32-foot clear heights and parking for 170 cars and is scheduled to deliver in Q4. The seller was represented by JLL’s Dominic Carbonari, Frank Griffin and Kate Coxworth.
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Chicago-based Evergreen Real Estate Group completed its $7M renovation of Garden House of Maywood, a 144-unit affordable senior rental community in Maywood, a western suburb of Chicago. Housing and Human Development Corp., a nonprofit organization formed to develop and acquire affordable housing for low-income seniors and families, owns the 10-story building at 515 South 2nd Ave. Evergreen has managed the community since 2017, the year before HHDC acquired it with tax credits that also helped fund the capital improvements.
THIS AND THAT
Comcast will build the network infrastructure for Veridian, a 225-acre mixed-use campus under development in northwest suburban Schaumburg. Veridian will include residential and office space, hotel, entertainment, dining and urban-style street retail districts. Comcast will offer internet speeds of up to 100 gigabits per second to businesses located in the development, company officials said.
