Stag Industrial is fawning over Chicagoland’s industrial market.
The publicly traded Boston-based REIT paid $74 million to buy five warehouse buildings totaling 726,000 square feet in DuPage and Will counties, to the west and south of downtown Chicago, public records show. The seller was a fund run by CBRE Investment Management, which installed two new co-CEOs earlier this month, Adam Gallistel and Andrew Glanzman, who became the first dedicated CEOs of CBRE’s investment arm since the retirement of Charles Leitner two years ago.
Stag’s purchases allowed CBRE to cash out of most of a portfolio it bought in 2017 as part of a spree of Chicagoland warehouses. The five buildings were last valued at $54 million during CBRE’s purchase, public records show.
CBRE held onto the largest asset in the portfolio, at 2700 Ellis Road in Joliet, which it also purchased in 2017 for nearly $41 million. It’s unclear why CBRE chose to keep that 625,000-square-foot building, the entirety of which is being marketed for lease, a brokerage brochure shows.
CBRE declined to comment, and Stag didn’t return a request for comment.
Their deal extends a boom for industrial property values, which have run up across the nation since the pandemic and online shopping placed a greater strain on the U.S. supply chain, even as record amounts of new warehousing hit the market in the Chicago area in the last two years. Development in the industrial market has helped to curtail the rise in property values, as tenants have leased new space slightly less rapidly than a year or two ago.
Chicagoland’s industrial vacancy rate remained steady at 4.88 percent in the third quarter, despite a 37.5 percent drop in leasing from the second quarter to 6 million square feet, according to Colliers. Positive net absorption and strong demand for mid-sized spaces, defined as those between 20,000 to 60,000 square feet, helped offset lower user demand and an influx of new supply. Build-to-suit projects are dominating, making up 80 percent of the development pipeline.
Three of the properties Stag bought are adjacent to each other in New Lenox, at 2105, 2200 and 2201 West Haven Avenue. They carried a combined $54 million in value, with the priciest being the 187,000-square-foot 2105 West Haven, leased to GVH Distribution.
The other two buildings sold were at 2520 Diehl Road in Aurora and 494 East Lies Road in Carol Stream.
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