Bank of America drops $56M on North Aurora industrial property

Seller American Realty Advisors paid $10M less in 2015

American Real Advisors' Scott Darling; 1200 Orchard Gateway Boulevard (Getty, American Realty Advisors, Opus Group)
American Real Advisors' Scott Darling; 1200 Orchard Gateway Boulevard (Getty, American Realty Advisors, Opus Group)

An industrial property in Chicago’s western suburbs is turning profits for institutional investors. 

Bank of America’s investment management arm paid $55.5 million for the 650,000-square-foot logistics building at 1200 Orchard Gateway Boulevard off Interstate 88 in North Aurora. The deal was almost $10 million more than the seller, American Realty Advisors, paid for the property in 2015, according to Kane County records. Neither party responded to a request for comment.

The deal underscores the resilience of the Chicagoland industrial market amid a slump in the broader commercial property market, even though vacancy in the sector ticked up last quarter.

That mark only moved up after hovering near record lows for much of the pandemic, though. A first quarter report from Avison Young tagged the metro area’s vacancy rate at 4.2 percent, and about three-quarters of the area’s submarkets, which total 1.1 billion square feet, had vacancies of 5 percent or less.

The Interstate 88 corridor that Bank of America just staked out a spot in is doing especially well. Vacancy sat at 2.5 percent last quarter and net absorption — a measure of how much space tenants lease versus leave — topped 1.1 million square feet.

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Across the entire market, leasing dealmakers topped 11 million square feet in transactions during the first quarter, stabilizing after reaching record-breaking levels during the pandemic, according to the brokerage. Asking rents climbed to $7.50 per square foot last year, the report said.

Los Angeles-based American Realty is a commercial real estate investment management service provider whose president is Scott Darling, and it has almost $13 billion in assets under management, according to the firm.

The North Aurora property sits on more than 32 acres and was constructed in 2014 for USAA Real Estate Company by Minneapolis firm The Opus Group, according to the developer’s website. Woodbridge-based logistics company Midwest Warehouse & Distribution System signed a long-term lease to become the property’s sole tenant in 2015, The Opus Group said.

USAA Real Estate Company sold the property to American Realty for $46.2 million in November 2015, according to public records. The USAA affiliate paid $4.9 million for the land in 2013, records show.

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