Industrial sales booming in Chicago as EKJ Wheeling, Thor Equities pick up 500K sf of space

Two companies picked up a total of 500,000 square feet of industrial space in the Chicago area last month, which is already on pace to exceed last year’s industrial sales volume.

EKJ Wheeling LLC bought a 310,000 square-foot industrial property at 43-47 West Hintz Road in Wheeling for $17 million, Cook County’s property records show. San Francisco-based Prologis sold the warehouse near Chicago Executive Airport, about 18 miles northwest of Chicago.

The Class B industrial building is about five miles to the I-294 interchange at Willow Road and IL-53, making it a favorable location for wholesale and e-commerce companies to transport products across the country. Prologis sold the warehouse after it nabbed a $100 million industrial and office facility at Goose Island in March, among the region’s largest commercial deals this year.

Chicago’s industrial market has been booming, propelled by e-commerce and big box retailers often leading to tenants engaging in bidding wars to lock down warehouse leases.

“You are at the epicenter of the county’s interstate network, it’s in the middle of the country so it’s really a network hub for distribution throughout the country,” said Craig Hurvitz, vice president of market research at Colliers International. “We have the county’s largest inland port, the CenterPoint Intermodal Center down in Joliet and Elwood.”

Thor Equities also picked up a pair of industrial properties totalling nearly 160,000 square feet in South Chicago. The company bought a 126,000 square-foot outdoor storage yard at 2750 West 35th Street for $7.2 million and a 33,870 square-foot truck terminal at 2940 West 36th Street for $4.1 million, property records show. Both properties are located alongside Chicago’s Interstate 55.

The project is Thor Equities’ 19th acquisition of industrial real estate this year. The seller is Rally Intermodal LLC with Michael LaFemina as a signatory.

The city’s industrial real estate sales totaled $1.52 billion in the first half of this year, on track to blow past last year’s $2.13 billion in sales. Investment sales volume is also set to increase by 150% this year compared with last year’s investment sales volume, according to Colliers International.

Hurvitz added net absorption, a metric used to measure demand, was 7.5 million square feet in the second quarter of this year, a huge jump from 4.7 million square feet in the second quarter of 2019. Demand drove down the vacancy rate of large scale warehouse space to 6.29 percent in the last quarter for industrial, approaching the lowest-recorded rate of 6.15 percent two years ago.

“We’ve seen several new users come into the market this year, last year I don’t see that trend dying anytime soon,” said Hurvitz.