Ares Management is jumping on properties built during Chicago’s covid-era industrial building boom.
The Los Angeles-based firm bought a 263,000-square-foot logistics center in Aurora for $58 million last month, marking its second big-ticket industrial purchase in the Chicago area in the last six months. The deal works out to $220-per-square-foot.
A venture of TradeLane Partners and Phelan Development took out a $26 million construction mortgage in 2023 to fund the development, although it’s unclear how much the project cost.
Ares also bought a 356,000-square-foot warehouse at 2200 Sullivan Road in Aurora for $46 million in a December transaction that worked out to $129 per square foot.
Similarly, the developer of that property, California-based Panattoni, took on a $25 million construction loan from Associated Bank in 2022 to fund the development. The project cost is also unknown.
Speculative industrial development in the suburbs peaked in the third quarter of 2023 when nearly 12 million square feet of space entered the market. That figure fell to 1.4 million in the first quarter of this year, according to JLL.
Growth in AI and data centers are generating big-ticket sales throughout the Chicago area.
In one of the biggest commercial sales of last year, Australian firm HMC Capital bought a warehouse in Elk Grove Village from Prologis for $440 million, with another $272 million on the line for the seller’s work to convert it into a data center.
Buyers of such properties might be able to charge higher rents as deliveries die down.
The average asking rate for industrial properties in the Chicago area increased to $8.59 per square foot as it continues its upward climb from the pandemic, CBRE found. In the first quarter of 2022, the average asking rent was $5.50 per square foot.
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