If you need a reference point for the strength of the Chicago industrial market, look just south of the Chicago River at 1901 West 29th Street.
The 219,000-square-foot shipping facility recently developed by Scannell Properties just traded for $52 million ($237 a foot). Cabot Properties was the buyer, according to public records.
Home to FedEx Ground’s Chicago shipping operation, the distribution center is one node in a network of smaller local facilities that FedEx leased up nationwide in recent years to handle the breakneck expansion of e-commerce.
Cabot acquired the property through its Core Industrial Fund II, a fund that acquires Class A distribution facilities. The fund has raised hundreds of millions of dollars in investments from public school employee pensions, including Pennsylvania-, New York-, and Louisiana Teachers Retirement Systems. The fund aims for a 8 to 10 percent return on investment.
In summer 2018, the fund dropped $37 million on a warehouse in Cicero, Illinois. The FedEx play marks the fund’s second acquisition in Cook County.
The deal is another illustrative example of strong market fundamentals in Chicago’s industrial sector. Vacancy rates have hit their lowest levels since 2001, according to a second-quarter Colliers International industrial market report.
Scannell Properties, which builds industrial spec projects, confirmed the deal. Cabot Properties could not be reached for comment.