Prologis has raked in $535 million from industrial property sales in the Midwest recently.
The San Francisco-based industrial power player sold an $85 million suburban Chicago portfolio shortly after offloading a larger portfolio near Minneapolis for $450 million.
The sales come at a time when industrial development, particularly in the Midwest, is starting to cool off after a pandemic-driven boom. Many projects started during the pandemic have hit the market in the past six months. The amount of industrial space entering the Chicagoland market in the third quarter of 2023 — 12.8 million square feet — was the highest since 1999, according to JLL.
The drop off has continued this year. The amount of industrial space under construction in the first quarter totaled 13.4 million square feet, compared to 41.2 million square feet during the same period of 2023, according to brokerage NAI Hiffman.
Prologis itself has predicted a slowdown in warehouse demand this year, as well.
Kane County records show Boston-based Stag Industrial bought five properties totaling about 950,000 square feet from Prologis this month at the following addresses in Elgin:
- 1575-1595 High Point Drive
- 200-220 Corporate Drive
- 225 Corporate Drive
- 300-330 Corporate Drive
- 350-370 River Edge Drive
The properties were previously owned by Denver-based DCT Industrial, a company that Prologis acquired in 2018. The firm paid $8.4 billion in stock and assumed debt for DCT’s entire U.S. portfolio.
As a part of the acquisition, Prologis paid DCT $82.7 million for the Elgin properties, along with a 363,000 square-foot Aurora industrial site. The Kane County purchase made up 1 million square feet out of DCT’s entire 5 million-square-foot portfolio in the Chicago area.
It is not clear why Prologis didn’t sell the Aurora property, at 2176 Diehl Road, to Stag Industrial along with the Elgin sites. Representatives of Prologis and Stag Industrial did not respond to requests for comment.
The Elgin sales come on the heels of Prologis offloading a large Minneapolis portfolio. The company sold 20 properties totalling 5 million square feet to EQT Exeter for $450 million last month. The properties are 90 percent leased to 54 tenants, according to a news release from suburban Philadelphia-based EQT Exeter.
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