A California teachers’ pension fund has paid $114 million for a massive, newly built industrial property in Chicago’s southwest suburbs.
The California State Teachers’ Retirement System bought the Weber55 Logistics Park, located on North Weber Road in Romeoville, from Oakbrook Terrace-based Molto Properties in a deal recorded in Will County public records earlier this month. Neither party provided a comment.
The two-building asset spans almost 900,000 square feet and sits on a 55-acre site. Molto Properties started construction on the speculative development in 2022 and completed it in the second quarter of this year, according to previously published reports.
The large deal underscores how hot of a commodity industrial real estate has become in the last several years, including for big-name and institutional investors, as it offered more stability than other commercial real estate sectors.
However, the market is softening across the country due to economic uncertainty, inflation and oversupply, according to a second-quarter report from JLL. There were almost 113 million square feet of industrial leases signed in the second quarter, a 47 percent drop year-over-year.
In Chicagoland, developers delivered 12.8 million square feet of industrial space last quarter, the highest quarterly volume since 15 million in the first quarter of 1999, according to a third-quarter market report from JLL. The large amount of speculative development kicked the metro’s vacancy rate up 75 basis points to 3.8 percent in the third quarter, though net absorption remained positive and totaled 2 million square feet. Leasing activity was down by more than half from the previous quarter, falling to 4.7 million.
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A jump in online shopping during the pandemic created a huge opportunity for industrial developers as companies restructured their supply chains and started seeking bigger warehouses with more advanced technology, Molto Properties founder Todd Naccarato told the Chicago Tribune last year.
“The pandemic created a lot of additional demand that normally was handled through retail outlets,” he told the newspaper.