E-commerce, logistics deals drive demand for Chicago industrial market

Brookfield Asset Management, Elion Partners to develop $1B of real estate as Timber Hill Group, Champion Realty Advisors plans $150M fund for logistics-related projects

Chicago /
Sep.September 23, 2021 03:21 PM
E-commerce, logistics deals drive demand for Chicago industrial market

Founder of Timber Hill Cary Goldman, CEO of Brookfield Bruce Flatt, and Elion Logistics Park 55 (Timber Hill Group, Brookfield, Elion Partners)

The rise of e-commerce is driving demand for industrial real estate in Chicago as investors seek to build logistics-related properties.

Brookfield Asset Management and logistics investor Elion Partners said today that it teamed up to develop about $1 billion of real estate at Elion Logistics Park 55, a 2,500-acre industrial park located at Interstate 55 and Lorenzo Road in Wilmington, Illinois.

The deal came a day after private equity firm Timber Hill Group and Champion Realty Advisors, a real estate agency, said they will start a $150 million fund to invest in logistics-related supply-chain properties.

“From the largest of users such as Amazons, Wal-Marts and Home Depots of the world down to a local truck operator, the demand has been outpacing supply and that fuel is going to continue.” said Cary Goldman, managing partner at Timber Hill.

Industrial tenants in Chicago signed 173 leases for 15.4 million square feet between April and June, a quarterly record. The vacancy rate dropped to 6.29 percent in that period, close to a low of 6.15 percent two years ago.

Brookfield and Elion’s project includes five fully leased Class A industrial assets and could develop as much as 15 million square feet more. Brookfield Managing Director Chris Reily said he’s excited to strike a deal in “supply-constrained markets with potential upside.”

Brookfield, which manages $625 million of assets, has been putting cash to work in new acquisitions. The asset manager said in July that it would use subsidiary Oaktree Capital Management to launch a private real estate investment trust.

Timber Hill and Champion Realty plan to acquire logistics-related supply-chain properties in major metropolitan markets to store, maintain or dispatch trucks, heavy equipment or bulk materials in the next 12 to 18 months.

Timber Hill buys logistics centric industrial assets across the nation. In Chicago, it focuses on managed parking lots for trucks and industrial outside storage, which large e-commerce companies such as Amazon rent for delivery vans.

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