Venture One, DRA team up on $369M industrial play

Acquiring 54 properties totalling 2.8 million sf

<p>CBRE&#8217;s Michael Caprile and 601-605 Kingsland Drive in Batavia (CBRE, Loopnet)</p>

CBRE’s Michael Caprile and 601-605 Kingsland Drive in Batavia (CBRE, Loopnet)

Venture One Real Estate has cashed out of a huge industrial portfolio concentrated in the Chicago area by bringing in DRA Advisors on a joint venture that’s acquiring the properties for $369 million.

The venture acquired 54 properties, amassing 2.8 million square feet, from a Venture One investment fund, which has now liquidated five of six investment funds along with partner company Kovitz Investment Group, Crain’s reported. A group of CBRE brokers led by Michael Caprile arranged the deal, which allowed Venture to close its fund and pay out investors while keeping a stake in the assets.

Of the 54 holdings, at least 40 of them are in the Chicago area, mostly in suburbs like Romeoville, Bensenville, Elk Grove Village and St. Charles. The properties vary greatly in size, including a 37,000-square-foot building at 1429 Shields Drive in Waukegan and a 489,000-square-foot building at 601-605 Kingsland Drive in Batavia, the outlet reported. The other holdings are located in Long Island, New Jersey and Philadelphia.

The deal is reflective of a strong industrial sector within an overall struggling commercial real estate market in Chicago. Vacancy rates for local warehouse space fell to a record low of 4.5 percent in the fourth quarter of 2022. Developers have responded, breaking ground last year on a record number of new industrial projects by starting construction on 88 properties totaling 31.8 million square feet.

However, rising interest rates have caused industrial sales and developments to slow in recent months. Given the abundance of warehouse space in the area, it’s possible vacancy rates shoot up this year. Nationwide industrial sales volume fell to $142 billion in the last 12 months through February, down nearly a quarter from the previous year, the outlet reported citing MSCI Real Assets.

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While the office market has yet to rebound from the pandemic, real estate players are looking to other promising sectors in the commercial realm. Chicago-based Glenstar, for instance, recently touted its turn into the industrial market, and away from its previous office and multifamily focus after handing back the Chicago Board of Trade Building to lender Apollo Global.

DRA, however, has continued to pour cash into Chicago-area multifamily as well as industrial properties. It spent more than $153 million last year to buy two suburban apartment complexes from Blackstone.

— Quinn Donoghue

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Venture One, DRA team up on $369M industrial play

Acquiring 54 properties totalling 2.8 million sf

<p>CBRE&#8217;s Michael Caprile and 601-605 Kingsland Drive in Batavia (CBRE, Loopnet)</p>

CBRE’s Michael Caprile and 601-605 Kingsland Drive in Batavia (CBRE, Loopnet)

Venture One Real Estate has cashed out of a huge industrial portfolio concentrated in the Chicago area by bringing in DRA Advisors on a joint venture that’s acquiring the properties for $369 million.

The venture acquired 54 properties, amassing 2.8 million square feet, from a Venture One investment fund, which has now liquidated five of six investment funds along with partner company Kovitz Investment Group, Crain’s reported. A group of CBRE brokers led by Michael Caprile arranged the deal, which allowed Venture to close its fund and pay out investors while keeping a stake in the assets.

Of the 54 holdings, at least 40 of them are in the Chicago area, mostly in suburbs like Romeoville, Bensenville, Elk Grove Village and St. Charles. The properties vary greatly in size, including a 37,000-square-foot building at 1429 Shields Drive in Waukegan and a 489,000-square-foot building at 601-605 Kingsland Drive in Batavia, the outlet reported. The other holdings are located in Long Island, New Jersey and Philadelphia.

The deal is reflective of a strong industrial sector within an overall struggling commercial real estate market in Chicago. Vacancy rates for local warehouse space fell to a record low of 4.5 percent in the fourth quarter of 2022. Developers have responded, breaking ground last year on a record number of new industrial projects by starting construction on 88 properties totaling 31.8 million square feet.

However, rising interest rates have caused industrial sales and developments to slow in recent months. Given the abundance of warehouse space in the area, it’s possible vacancy rates shoot up this year. Nationwide industrial sales volume fell to $142 billion in the last 12 months through February, down nearly a quarter from the previous year, the outlet reported citing MSCI Real Assets.

Sign Up for the undefined Newsletter

By signing up, you agree to TheRealDeal Terms of Use and acknowledge the data practices in our Privacy Policy.

While the office market has yet to rebound from the pandemic, real estate players are looking to other promising sectors in the commercial realm. Chicago-based Glenstar, for instance, recently touted its turn into the industrial market, and away from its previous office and multifamily focus after handing back the Chicago Board of Trade Building to lender Apollo Global.

DRA, however, has continued to pour cash into Chicago-area multifamily as well as industrial properties. It spent more than $153 million last year to buy two suburban apartment complexes from Blackstone.

— Quinn Donoghue

Read more

Tags