Prologis purchase of Medical District warehouse shows Chicago industrial market’s strength

The deal for the Hastings Street property was a sharp increase in price from what R2 paid for it in 2014

Chicago /
Jan.January 07, 2019 02:30 PM

R2’s Managing Principal Matt Garrison, and 2059-2061 West Hastings Street (Credit: Showcase and Twitter)

Prologis bought an 85,000-square-foot warehouse in the Illinois Medical District for nearly twice what R2 Companies paid four years ago, highlighting the continued demand for last-mile industrial assets.

Chicago-based R2 bought the property at 2059-2061 West Hastings Street in 2014 for $3.9 million, and sold it to warehouse landlord Prologis on Dec. 27 for $7.1 million. The most recent purchase works out to $84 per square foot.

The building’s major tenant is Rush medical center, which is moving out next year.

The deal illustrates the demand for last-mile delivery assets from institutional buyers, and a recent panel of leaders convened by NAIOP said the dwindling availability of vacant land is slowing mega-scale industrial construction, with developers now shifting to a broader base of smaller infill projects.

“You’re seeing the market get stronger the smaller you get,” Matt Goode, a principal of the Rosemont-based Venture One Real Estate, said during the event.

Prologis last year made big investments in industrial space, acquiring rival logistics owner DCT Industrial Trust’s 71 million square feet for $8.4 billion in stock and giving the company more exposure to key markets like New York, Southern California and South Florida.

R2, meanwhile, has been active across the Chicago market lately, listing two West Loop buildings it bought with Walton Street Capital for $55 million a couple months after buying a landmark Old Town building with plans to renovate it.

The firm last year announced it was moving its Chicago headquarters from the West Loop to a freshly-renovated 55,000-square-foot building on Goose Island, near where a number of buildings in its portfolio are located.


Related Articles

arrow_forward_ios
Sam Zell of Equity Commonwealth and Michael Landy of Monmouth Real Estate Investment (Getty, ACRE)
Sam Zell acquires Monmouth Real Estate for $3.4B
Sam Zell acquires Monmouth Real Estate for $3.4B
ML Realty Partners founder Michael Luecht, Prologis CEO Hamid Moghadam and Mohawk Terrace. (Google Maps, ML Realty, Prologis)
“Opportunity of a lifetime”: ML Realty, Prologis buy out homeowners
“Opportunity of a lifetime”: ML Realty, Prologis buy out homeowners
Missner Group CEO Barry Missner and 1220 West Van Buren Street, a warehouse it had planned to convert into loft-style offices. (Google Maps)
Missner lists West Loop warehouse after scuttling office conversion plan
Missner lists West Loop warehouse after scuttling office conversion plan
 Prologis CEO Hamid Moghadam and 930 West Evergreen Avenue (Google Maps)
Prologis warehouse buy is Chicago’s priciest of 2021
Prologis warehouse buy is Chicago’s priciest of 2021
Port of Chicago (BartShore/Wikipedia, iStock)
Big development opportunity on tap at Port of Chicago
Big development opportunity on tap at Port of Chicago
Amita CEO Keith Parrott and the Amita Health’s Lisle headquarters at 2601 Navistar Drive in Lisle (Amita, Google Maps)
Amita Health adds to wave of suburban office subleases
Amita Health adds to wave of suburban office subleases
From left: DL3 Realty’s Leon Walker, Discover’s Roger Hochschild, Mayor Lori Lightfoot, and 8560 South Cottage Grove Avenue. (DL3, Discover, Getty, Google Maps)
DL3 Realty signs Discover to big South Side lease
DL3 Realty signs Discover to big South Side lease
Blackstone’s Jonathan Gray and CenterPoint CIO Jim Clewlow with one of the properties, 225 Spring Lake Drive, Itasca (Getty, Linkedin, Google Maps)
Blackstone expands industrial reach with $151M Chicago buy
Blackstone expands industrial reach with $151M Chicago buy
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...