NorthPoint Development’s $270 million investment in Elgin this month is one of the biggest industrial real estate purchases in the Chicago area so far this year, and in recent memory.
The Kansas City-based firm bought a portfolio of about a dozen warehouses spanning 2.8 million square feet in the northwest Chicago suburb, paying about $96 per square foot, public records show.
Massachusetts-based seller High Street Logistics cashed in on an upswing in the region’s industrial market with the sale. The company, founded by former Trammell Crow Executive Robert Chagares 23 years ago, bought the portfolio for about $230 million in 2021.
In another big deal in Elgin, San Francisco-based industrial power player Prologis sold an $85 million industrial portfolio in July.
The Chicago area’s access to freshwater and railroads has made it a stronghold in the industrial sector for decades, but the pandemic spurred a building boom and even more interest from investors.
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 led to a supply imbalance, and the pipeline slowed to 1.4 million square feet in the first quarter, according to JLL.
As deliveries settle down, investors are snapping up inventory.
Los Angeles-based Ares Management 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 worked out to $220-per-square-foot.
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.
The average asking lease rate for industrial properties in the Chicago area has 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.
The Elgin industrial properties that High Street Logistics Properties sold to NorthPoint Development are the following:
- 2550-2580 Northwest Parkway, $26.4M, 501,000 square feet
- 2400-2430 Galvin Drive, $34.5M, 343,000 square feet
- 2500-2580 Galvin Drive, $53.4M, 548,000 square feet
- 2800-2880 Galvin Drive, $14.5M, 117,000 square feet
- 2760-2770 Spectrum Drive, $24.5M, 154,500 square feet
- 2780-2794 Spectrum Drive, $23.7M, 241,000 square feet
- 2583 Technology Drive, $25.2M, 250,000 square feet
- 2500-2540 Northwest Parkway, $23.2M, 250,000 square feet
- 2500-2530 Vantage Drive, $13.6M, 110,000 square feet
- 2400-2420 Vantage Drive, $10.3M, 75,000 square feet
- 2300-2380 Galvin Drive, $21.1M, 219,000 square feet