Demand for industrial real estate is so strong in suburban Chicago that firms are buying out homeowners in order to assemble enough property to build warehouses.
The latest example is in Bensenville, where industrial investors ML Realty Partners and Prologis spent $64 million to purchase more than 100 homes that will be cleared for two complexes, Crain’s reported.
Located in the O’Hare submarket, the homes comprise the Mohawk Terrace subdivision. In some cases owners received triple what they paid for their properties; one home that was bought for $240,000 sold to the developers for $700,000, according to the report. One seller called it “the opportunity of a lifetime.”
The subdivision is bound by Devon Avenue to the north and Busse Road to the east. There are several industrial properties nearby.
Rendering of the project (ML Realty)
ML Realty and Prologis will raze the Mohawk Terrace homes to build two warehouses totaling 600,000 square feet, according to a report in Commercial Property Executive. Construction will begin in the summer and be completed by spring. ML Realty began contacting homeowners in 2019 about the buyouts, but Prologis wanted in on the deal as well, and soon acquired a few properties, according to Crain’s. The two firms eventually came to an agreement about the joint warehouse construction.
Founded by Michael Luecht, ML Realty has long been an active player in the Chicago market. In March, Prologis paid nearly $100 million for a 340,000-square-foot Goose Island warehouse and office building. It was the priciest deal of the year in its category in Chicago.
[Crain’s] — Alexi Friedman