Chicago Industrial Submarket Narratives
2Q 2015
Table of Contents
Submarket
Page
Overall Chicago Market
I-55 Corridor
I-80 Corridor
I-88 Corridor
Lake County
North Cook
North DuPage County
O'Hare
2
4
6
8
10
12
14
16
West Cook County
18
Southeast Wisconsin
20
North Kane County
22
Northwest Indiana
24
South Chicago
26
1
Chicago | Market News
Second Quarter 2015
LEASE ACTIVITY
Chicagoland posted its 19th consecutive quarter of positive net absorption in Quarter 2 as
vacancy rates declined across 12 of the region’s submarkets. Despite indications the market
remains leveraged in landlord favor, overall leasing activity is strong and tenant demand
continues to escalate. The most significant lease of the second quarter was M Block’s
extension at 18801 Oak Park Ave. in Tinley Park with 915,643 square feet of space. In Joliet,
Whirlpool, the home appliance manufacturer, signed a new lease of 752,410 square feet at
3851 Youngs Road. Amazon signed a new lease at 401 E. Laraway Road in Joliet for 475,104
square feet, as the e-commerce giant continues to increase its distribution footprint in the
market. In addition, Fellowes, an office product manufacturer, signed a build-to-suit in Aurora
with 499,154 square feet.
KEY MARKET INDICATORS
1,107,679,981
Total direct vacancy (%)
7.5%
Total vacancy (%)
7.6%
Demand
Total net absorption (s.f.)
6,124,619
YTD net absorption (s.f.)
7,589,832
Pricing
Average rental rate (nnn)
$4.78
Supply
Total inventory (s.f.)
12-month percent change
10.9%
Arrows represent change from prior quarter
NET NEW SUPPLY, NET ABSORPTION, VACANCY
s.f.
19,000,000
Net new supply
Net absorption
Total vacancy
14.0%
14,000,000
12.0%
9,000,000
10.0%
4,000,000
8.0%
-1,000,000
6.0%
-6,000,000
-11,000,000
4.0%
-16,000,000
2.0%
-21,000,000
0.0%
2009
2010
2011
2012
2013
2014
2Q15
AVERAGE RENTAL RATE
$5.00
$4.50
$4.78
$4.44
$4.13
$4.12
$4.12
$4.27
$4.35
$4.00
$3.50
$3.00
$2.50
$2.00
2009
2010
2011
2012
2013
2014
2Q15
RENTS
Average asking rents stand at $4.78 per square-foot, representing a 10.9 percent gain over
the year. Rising construction labor and material costs are pushing landlords to increase
asking rents.
SALES AND CONSTRUCTION
The most notable investment sale in the second quarter was Exeter’s four building acquisition
from JP Morgan. The portfolio totaling 894,000 square feet traded at $48.07 per square foot
at a 7.5 cap. While the buildings were spread across three generally less active submarkets;
Northwest Indiana, I-57 Corridor, and Fox Valley, they all feature modern precast
construction. In a separate transaction Exeter acquired a Midwest industrial portfolio from
Duke Realty at a 7.6 cap. The portfolio included eight buildings in Chicago totaling 874,000
square feet. In Plainfield, Diageo purchased a 272,000 square foot warehouse at 14020 S.
Coil Plus Drive from TA Associates, which is adjacent to its bottling plant.
ECONOMIC OUTLOOK
With dwindling big box availabilities we expect to see consistent build-to-suit consolidation
activity for superregional distribution centers. The main impediment to construction is a
shortage of precast panels as the region’s producers face months of backlog. As
subcontractors are staying busy, construction labor wages will increase across the region.
The two most active developers are OPUS with three speculative projects currently underway
and Panattoni with seven spec projects in various phases of planning and development.
RECENT SALES COMPARABLES (sorted by square feet)
Buyer
Seller
Location
City
Size (s.f.)
Date
Price / s.f.
Exeter
JP Morgan
4 properties
Metro Chicago
894,000
4/7/15
$48.07
Exeter
Duke
8 properties
Metro Chicago
874,000
4/8/15
$52.54
Diageo
TA Associates
14020 S. Coil Plus Dr.
Plainfield
272,000
6/1/15
$37.10
Cabot
Brennan/Goldman
3602 N. Kennicott
Arlington Heights
94,300
5/27/15
$72.11
RECENT LEASE COMPARABLES (sorted by square feet)
Tenant
Type
Location
City
Size (s.f.)
M Block
Extension
18801 Oak Park Ave.
Tinley Park
915,643
Whirlpool
New lease
3851 Youngs Rd.
Joliet
752,410
Fellowes
Build-to-suit
Duke Parkway
Aurora
499,154
Amazon
New lease
401 E Laraway Rd.
Joliet
475,104
2
Chicago I Market News
MARKET MAP
90
WA LW O R T H
SOUTHWEST WISCONSIN
SOUTHEAST WISCONSIN
43
39
94
ROCKFORD
90
MCHENRY
LAKE COUNTY
NORTHWEST COOK
90
NORTH K ANE
39
NORTH COOK
O’HAR E
I-39 / DEK ALB
NORTH CHICAGO
88
N O R T H D U PAG E
F O X VA L L E Y
290
WEST COOK
88
I-88 CORRIDOR
294
S O U T H C H I C AG O
355
SOUTH SUBURBS
39
I-80 WEST
80
90
NORTHWEST INDIANA
57
80
94
80
I-55 CORRIDOR
I- 80 CORRIDOR
65
I- 57 CORRIDOR
55
SUBMARKET CHARACTERISTICS
•
Robust capital markets provide liquidity for institutional
investors
•
Chicago is an industrial gateway city with
global connectivity
•
Chicago’s inland port; The convergence of six Class I
railroads and heavy and advanced manufacturing make it a
premier U.S. market
•
Population: 9.7M; annual employment gains
in seven of ten employment sectors
SUBMARKET STATISTICS
Total
inventory
(s.f.)
Total
vacancy
(%)
Total
availability
(%)
Q2 total net
absorption
(s.f.)
YTD total net
absorption
(s.f)
Warehouse / Distribution
634,277,212
8.9%
12.7%
3,965,294
6,241,096
Manufacturing
322,835,041
6.6%
9.3%
1,786,936
Flex / R&D
69,071,499
11.0%
14.0%
583,627
1,107,679,981
7.6%
11.0%
6,124,619
7,589,832
Property type
Total Industrial
Average direct
Under
YTD
asking rent construction
completions
($ p.s.f.)
(s.f.)
$4.90
8,236,098
8,626,960
441,397
$4.55
641,520
1,029,000
-218,733
$11.07
0
0
$4.78
8,877,618
9,709,640
©2015 Jones Lang LaSalle IP, Inc. All rights reserved. No part of this publication may be reproduced by any means, whether graphically, electronically, mechanically or otherwise howsoever, including without limitation
photocopying and recording on magnetic tape, or included in any information store and/or retrieval system without prior written permission of Jones Lang LaSalle. The information contained in this document has been compiled
from sources believed to be reliable. Jones Lang LaSalle or any of their affiliates accept no liability or responsibility for the accuracy or completeness of the information contained herein and no reliance should be placed on the
information contained in this document.
3
I-55 Corridor I Submarket News
Second Quarter 2015
LEASING ACTIVITY
The largest transaction of the second quarter was a renewal by Ozburn Hessey Logistics for
541,123 square feet at 1011 Taylor Road. Another notable renewal occurred at 1251 W 115th
Street in Bolingbrook where LG Electronics signed a five year lease for 337,630 square feet. A
253,263 square-foot commitment in Duke Realty’s Enterprise Distribution Center marked the
most significant new lease to occur in I-55 during the second quarter. MAT Holdings will be the
first tenant in the 324,115 square foot speculative development that wrapped up construction
shortly before the transaction occurred. The space at 1341 Enterprise Drive will be the global
manufacturing and distribution firm’s second facility in the Village of Romeoville.
KEY MARKET INDICATORS
81,473,577
Total direct vacancy (%)
8.6%
Total vacancy (%)
8.9%
Demand
Total net absorption (s.f.)
569,942
YTD net absorption (s.f.)
1,012,316
Pricing
Average rental rate (nnn)
$5.53
Supply
Total inventory (s.f.)
12-month percent change
23.4%
Arrows represent change from prior quarter
NET NEW SUPPLY, NET ABSORPTION, VACANCY
s.f.
6,000,000
Net new supply
Net absorption
Total vacancy
19%
5,000,000
17%
4,000,000
15%
3,000,000
13%
11%
2,000,000
9%
1,000,000
7%
0
5%
2007
2008
2009
2010
2011
2012
2013
2014
2Q15
AVERAGE ASKING RENTAL RATE
$6.00
$5.53
$5.50
$5.00
$4.50
$4.17
SALES AND CONSTRUCTION
Prologis acquired two neighboring vacant buildings from International Airport Centers at 800
and 850 Veterans Parkway in Bolingbrook. These two buildings total nearly 700,000 square
feet and were formerly occupied by a 3PL servicing the US Postal Service mail transport
equipment requirement and will need minor cosmetic make-ready improvements. Six
speculative warehouses totaling 1.7 million square feet were completed in the second quarter
delivering approximately 1.3 million square feet of vacant space. The largest delivery was part
of ML Realty’s Heritage Crossings development, a 512,265 square foot warehouse 14908 S.
Gougar Road in Lockport. 804,000 square feet of product is currently under construction. As
new product continues to come online, the vacancy rate could tick up but should remain in a
healthy balance between 8.0 and 10.0 percent.
$4.45
$4.10
$4.07
$4.00
$3.50
$3.54
$3.50
$3.45
$3.51
2009
2010
2011
2012
$3.00
$2.50
$2.00
2007
RENTS
Tenant demand consistently remains strong in I-55 which is Chicago’s premier distribution
corridor. New speculative deliveries and declining vacancy rates have pushed asking rents
across the submarket. At $5.53, the current average asking rent in I-55 stands approximately
$1.08 higher than it did in 2014. Actual taking rents average $4.82 in comparison to $4.56 last
year.
2008
2013
2014
2Q15
ECONOMIC OUTLOOK
Prospects for the I-55 corridor remain strong due to the quality of the building stock and labor
force. Higher asking rates present a hurdle and some price-conscious users are expanding their
search parameters for lower cost space in the South Suburbs, I-80, or the I-57 Corridor.
Investors increasingly are turning down short-term deals preferring to hold out for longer-term,
credit tenants with a minimum three to five year commitment.
RECENT SALES COMPARABLES (sorted by square feet)
Buyer
Seller
Location
City
Size (s.f.)
Date
Price / s.f.
Prologis
IAC
850 Veterans Parkway
Bolingbrook
361,176
4/30/15
TBD
Prologis
IAC
800 Veterans Parkway
Bolingbrook
325,160
4/30/15
TBD
High Street Realty
Clark Foam Products Inc.
655 Remington Blvd
Bolingbrook
79,194
4/8/15
$66.92
RECENT LEASE COMPARABLES (sorted by square feet)
Tenant
Type
Location
City
Size (s.f.)
OHL
Renewal
1011 Taylor Rd
Romeoville
541,123
LG Electronics
Renewal
1251 W 115th
Bolingbrook
337,630
MAT Holdings
New lease
1341 Enterprise Drive
Romeoville
253,263
RJW Transport
New lease
700 Gateway Drive
Bolingbrook
206,711
4
I-55 Corridor I Submarket News
SUBMARKET MAP
SUBMARKET CHARACTERISTICS
•
High velocity market for both lease and sale activity
•
Close proximity to Joliet intermodals
•
Big box class A bulk distribution
•
Large, available and skilled local workers
SUBMARKET STATISTICS
Total
inventory
(s.f.)
Total
vacancy
(%)
Total
availability
(%)
Q2 net
absorption
(s.f.)
YTD total net
absorption
(s.f)
Warehouse / Distribution
66,482,295
10.4%
14.7%
529,877
995,523
Manufacturing
11,658,637
2.6%
6.9%
18,585
Flex / R&D
3,577,126
7.2%
8.2%
-5,991
Total Industrial
81,473,577
8.9%
13.1%
569,942
Property type
Average direct
Under
YTD
asking rent construction
completions
($ p.s.f.)
(s.f.)
$5.56
804,855
2,607,533
-34,687
$4.98
0
0
23,372
$11.55
0
0
1,012,316
$5.53
804,855
2,607,533
©2015 Jones Lang LaSalle IP, Inc. All rights reserved. No part of this publication may be reproduced by any means, whether graphically, electronically, mechanically or otherwise howsoever, including without limitation
photocopying and recording on magnetic tape, or included in any information store and/or retrieval system without prior written permission of Jones Lang LaSalle. The information contained in this document has been compiled
from sources believed to be reliable. Jones Lang LaSalle or any of their affiliates accept no liability or responsibility for the accuracy or completeness of the information contained herein and no reliance should be placed on the
information contained in this document.
5
I-80 Corridor I Submarket News
Second Quarter 2015
LEASING ACTIVITY
A seven and a half year lease inked by Whirlpool in Joliet’s Clarius Park marks the most significant
transaction to occur in the I-80 Corridor in the second quarter. The 752,410 square foot space at 3851
Youngs Road represents a new node in Whirlpool’s distribution network. Given the bulky size of the
company’s products, the market’s only existing availability in excess of 1 million square feet was a
natural fit. Potential to expand and extend rail to the building both factored into Whirlpool’s decision. In
another notable transaction, Amazon signed on its fourth Chicagoland distribution center in a lease for
474,104 square feet at 401 E Laraway in Joliet. The deal is part of the e-commerce giant’s move to
strategically position itself to serve a dense customer base throughout the greater Midwest region.
KEY MARKET INDICATORS
57,296,809
Total direct vacancy (%)
9.7%
Total vacancy (%)
9.7%
Demand
Total net absorption (s.f.)
7,461
YTD net absorption (s.f.)
170,098
Pricing
Average rental rate (nnn)
$3.86
Supply
Total inventory (s.f.)
RENTS
The I-80 leasing market has benefitted from spillover demand in the white-hot I-55 and I-88 submarkets
and rental rates currently stand at $3.86 per square-foot. Users in the 400,000 to 700,000 square-foot
size segment have very limited options for Class A space within close proximity to the intermodals.
12-month percent change
11.2%
Arrows represent change from prior quarter
NET NEW SUPPLY, NET ABSORPTION, VACANCY
s.f.
6,000,000
Net new supply
Net absorption
Total vacancy
19.3%
5,000,000
16.5%
4,000,000
3,000,000
13.6%
2,000,000
10.8%
1,000,000
0
8.0%
2007
2008
2009
2010
2011
2012
2013
2014
2Q15
SALES AND CONSTRUCTION
The only notable sale in the second quarter was Diageo’s purchase of a 272,000 square-foot Class B
building at 14020 S Coil Plus Drive in Plainfield. TA Associates sold the building for $37 per squarefoot. This is a strategic acquisition by the global liquor conglomerate as they have a large rail served
bottling plant right across the street. Ridge Development has enclosed a 574,000 square-foot
distribution building of which 288,000 square feet is preleased to Consolidated Distribution. Ridge and
capital partner, Elion recently committed to expanding the building to up to 1.08 million square feet.
IKEA announced that they have future plans for the Ryan Cos to build a second1.4 million square-foot
distribution center on Laraway Road in Joliet. The company expects to occupy their first 1.4 million
square-foot facility in 2017. Also of note, Hillwood Properties has begun marketing a proposed
746,772 square foot building on Rowell Road.
AVERAGE ASKING RENTAL RATE
$4.00
$3.80
$3.60
$3.40
$3.20
$3.00
$2.80
$2.60
$2.40
$2.20
$2.00
$3.86
$3.25
2007
$3.17
$3.18
$3.11
2008
2009
2010
$3.38
$3.41
$3.36
$3.41
2011
2012
2013
2014
ECONOMIC OUTLOOK
I-80 is home to both the BNSF and Union Pacific intermodal terminals and intermodal volume remains
strong following the resolution of the labor disputes on the West Coast. An ongoing legal dispute
between the town of Elwood and CenterPoint over TIF payments has closed off the Walter Strawn
Drive railroad crossing serving the BNSF terminal. This shutdown forces truckers to take an alternate
route to the terminals adding to drayage costs. Congestion is an issue as an average of 47,000
vehicles per day travel I-55 near at the new Arsenal Road interchange
2Q15
RECENT SALES COMPARABLES (sorted by square feet)
Buyer
Seller
Location
City
Size (s.f.)
Date
Price / s.f.
GIC/Global Logistic Properties
IndCor
401 E Laraway Rd (Part of Portfolio)
Joliet
475,104
2/27/15
$33.91
GIC/Global Logistic Properties
Diageo
IndCor
TA Associates
251 Laraway Rd (Part of Portfolio)
14020 S Coil Plus Drive
Joliet
Plainfield
374,460
272,217
2/27/15
6/1/15
$33.91
$37.10
The Schrein's of Lockport LLC
Intelligent Solutions, Inc.
9930 190th Street
Mokena
25,600
4/24/15
$85.71
RECENT LEASE COMPARABLES (sorted by square feet)
Tenant
Type
Location
City
Size (s.f.)
Whirlpool
New lease
3851 Youngs Road
Joliet
752,410
Amazon
New lease
401 E Laraway Road
Joliet
475,104
WW Grainger
New lease
3501 Corporate Road
Joliet
408,932
International Transload Logistics
New lease
3801 CenterPoint Way
Joliet
303,061
6
I-80 Corridor I Submarket News
SUBMARKET MAP
SUBMARKET CHARACTERISTICS
•
Big box class A bulk distribution
•
Inland port and logistics hub
•
Large workforce
•
Multi-state regional distribution
SUBMARKET STATISTICS
Total
inventory
(s.f.)
Total
vacancy
(%)
Total
availability
(%)
Q2 net
absorption
(s.f.)
YTD total net
absorption
(s.f)
Warehouse / Distribution
44,351,053
9.3%
10.1%
97,239
217,079
$3.64
3,390,151
751,996
Manufacturing
9,030,057
12.5%
6.1%
-9,700
-9,700
$7.35
0
0
842,381
9.0%
11.4%
-964
5,586
$8.83
0
0
57,296,809
9.7%
9.5%
7,461
170,098
$3.86
3,390,151
751,966
Property type
Flex / R&D
Total Industrial
Average direct
Under
YTD
asking rent construction
completions
($ p.s.f.)
(s.f.)
©2015 Jones Lang LaSalle IP, Inc. All rights reserved. No part of this publication may be reproduced by any means, whether graphically, electronically, mechanically or otherwise howsoever, including without limitation
photocopying and recording on magnetic tape, or included in any information store and/or retrieval system without prior written permission of Jones Lang LaSalle. The information contained in this document has been compiled
from sources believed to be reliable. Jones Lang LaSalle or any of their affiliates accept no liability or responsibility for the accuracy or completeness of the information contained herein and no reliance should be placed on the
information contained in this document.
7
I-88 Corridor I Submarket News
Second Quarter 2015
LEASE ACTIVITY
Three significant build-to-suit transactions were inked in the first half of 2015 in the I-88
Corridor. Conor Commercial committed to building a new 305,000 square-foot facility for
PPG within the Deer Path Commerce Center in North Aurora. Duke Realty will construct
two new corporate headquarters and distribution facilities in their Butterfield Park in Aurora.
Fellowes will occupy a 499,000 square-foot building and Shorr Packaging will have a new
243,000 square-foot facility. Both buildings are scheduled to deliver in second quarter 2016.
KEY MARKET INDICATORS
56,545,438
Total direct vacancy (%)
5.2%
Total vacancy (%)
5.4%
Demand
Total net absorption (s.f.)
845,912
YTD net absorption (s.f.)
875,665
Pricing
Average rental rate (nnn)
$4.37
Supply
Total inventory (s.f.)
12-month percent change
7.6%
Arrows represent change from prior quarter
NET NEW SUPPLY, NET ABSORPTION, VACANCY
s.f.
2,500,000
Net new supply
Net absorption
Total vacancy
14%
2,000,000
12%
1,500,000
11%
1,000,000
9%
500,000
8%
0
6%
-500,000
-1,000,000
5%
2007
2008
2009
2010
2011
2012
2013
2014
2Q15
AVERAGE ASKING RENTAL RATE
$5.00
$4.50
RENTS
Rents have seen a healthy growth trajectory from the depth of the economic contraction.
They currently stand at $4.37 per square-foot as leverage is firmly in the landlord’s favor.
With only four Class A spaces over 200,000 existing in the I-88 Corridor and equally tight
conditions in Central DuPage and the Fox Valley, users are forced to expand their search
parameters to the I-55 or I-80 Corridors for big box space. However, two functional Class B
lower cost options exist in nearby towns. In Montgomery, STAG has 296,000 square-feet
available at 2001-2051 Baseline Road and in West Chicago, Prologis has 466,000 square
feet of rail-served space available at 1717 W Harvester.
$4.47
$4.07
$3.96
$4.00
$3.94
$4.01
$3.97
$4.12
$4.36
$4.37
$3.50
$3.00
$2.50
$2.00
2007
2008
2009
2010
2011
2012
2013
2014
2Q15
SALES AND CONSTRUCTION
As part of Duke Realty’s disposition of a 51 building Midwest portfolio to Exeter, four Aurora
buildings traded hands. Across Chicago, there were eight buildings in the package totaling,
700,000 square feet which traded at a 7.6 cap. Following Shorr Packaging’s new build-tosuit lease with Duke, they will vacate their current 117,000 square-foot facility which they
sold to VentureOne for $47 per square-foot. VentureOne, which has been actively
acquiring vacancy across the market, is currently marketing the facility for lease. In the
first quarter, Liberty Property Trust delivered a 429,000 square-foot speculative building at
300 Mitchell Road. UTI which currently has another 150,000 square-foot facility in Aurora
preleased 201,000 square feet with Liberty.
ECONOMIC OUTLOOK
As the second largest city in Illinois, Aurora is home to a deep workforce and five
accessible tollway exchanges. Over 200,000 people reside in Aurora, along with over 6,000
businesses. 320 acres of downtown landscape and 17 first-class business parks have
attracted new businesses. Institutional investors, including Duke Realty and Liberty
Property Trust, control a significant portion of the modern, high bay, bulk product in the area
and possess substantial land holdings.
RECENT SALES COMPARABLES (sorted by square feet)
Buyer
Seller
Location
City
Size (s.f.)
Date
Price / s.f.
Venture One
Shorr Packaging
Aurora
116,000
5/12/15
$46.64
Exeter Property Group
Duke Realty Corporation
Aurora
104,928
4/8/15
$58.14
Exeter Property Group
Duke Realty Corporation
800 N Commerce Street
3737 E Exchange Avenue (Part of
Portfolio)
611-615 N Enterprise Drive (Part of
Portfolio)
Aurora
83,818
4/8/15
$56.07
RECENT LEASE COMPARABLES (sorted by square feet)
Tenant
Type
Location
City
Size (s.f.)
Fellowes
Built to suit
Duke Parkway
Aurora
499,154
PPG Architectural Finishes
Build to suit
Orchard Gateway Boulevard
Aurora
304,560
KapStone Paper
Expansion
2759 Eola Road
Aurora
140,000
D2K Traffic Equipment
New lease
1251 Frontenac Road
Naperville
44,950
8
I-88 Corridor | Submarket News
SUBMARKET MAP
SUBMARKET CHARACTERISTICS
•
Higher ratio of Flex, R&D industrial product when compared to
other Chicago suburban industrial submarkets
•
As a result, the I-88 submarket affords a more corporate image
•
A alternative industrial submarket to
that of the I-55 Corridor but at a
price premium
SUBMARKET STATISTICS
Total
inventory
(s.f.)
Total
vacancy
(%)
Total
availability
(%)
Q2 net
absorption
(s.f.)
YTD total net
absorption
(s.f)
Warehouse / Distribution
33,697,593
5.8%
9.6%
909,360
995,779
$4.25
1,046,086
929,012
Manufacturing
17,121,893
5.1%
6.4%
36,544
-6,778
$6.10
0
0
Flex / R&D
3,066,493
7.9%
13.4%
15,387
46,259
$9.74
0
0
Total Industrial
56,545,438
5.4%
8.2%
845,912
875,665
$4.37
1,046,086
929,012
Property type
Average direct
Under
YTD
asking rent construction
completions
($ p.s.f.)
(s.f.)
©2015 Jones Lang LaSalle IP, Inc. All rights reserved. No part of this publication may be reproduced by any means, whether graphically, electronically, mechanically or otherwise howsoever, including without limitation
photocopying and recording on magnetic tape, or included in any information store and/or retrieval system without prior written permission of Jones Lang LaSalle. The information contained in this document has been compiled
from sources believed to be reliable. Jones Lang LaSalle or any of their affiliates accept no liability or responsibility for the accuracy or completeness of the information contained herein and no reliance should be placed on the
information contained in this document.
9
Lake County I Submarket News
Second Quarter 2015
LEASE ACTIVITY
Paris Presents agreed to renew with STAG Industrial for 223,760 square feet for 54 months at 3800
Swanson Court in Gurnee. STAG acquired this building in October 2012. In Libertyville, Brightstar
committed to a five year renewal with John Hancock for 151,000 square feet at 1001 Technology
Drive. John Hancock also signed another significant lease in the second quarter in Buffalo Grove.
Veritas Document Solutions, a subsidiary of R. R. Donnelly, leased 121,000 square feet at 911
Commerce. Also of note, BMC, a division of VisualPak came to terms on a 87,000 square-foot
manufacturing lease in the Amherst Lakes Business Park in Waukegan.
KEY MARKET INDICATORS
70,673,254
Total direct vacancy (%)
7.9%
Total vacancy (%)
7.9%
Demand
Total net absorption (s.f.)
-84,849
YTD net absorption (s.f.)
21,873
Pricing
Average rental rate (nnn)
$4.94
Supply
Total inventory (s.f.)
12-month percent change
-11.1%
Arrows represent change from prior quarter
NET NEW SUPPLY, NET ABSORPTION, VACANCY
s.f.
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
-500,000
-1,000,000
-1,500,000
-2,000,000
-2,500,000
Net new supply
Net absorption
Total vacancy
13.8%
12.0%
10.3%
8.5%
6.8%
5.0%
2007
2008
2009
2010
2011
2012
2013
2014
2Q15
AVERAGE ASKING RENTAL RATE
$7.00
$6.50
$6.00
$5.50
$5.00
$4.50
$4.00
$3.50
$3.00
$2.50
$2.00
$6.56
$6.37
$5.61
2007
2008
2009
$5.21
2010
$5.02
$5.12
$5.27
$5.44
2011
2012
2013
2014
$4.94
2Q15
RENTS
Lake County is considered a high rent district in the Chicago market due to land constraints, a
smaller base of product and affluent demographics. Current asking rates stand just under five
dollars per square-foot and are expected to climb due to limited new supply and steady tenant
demand. Although a large portion of Lake County is owner-occupied lease velocity has been
increasing due to growing business needs amongst mid-sized users and a general uptick in the
overall economy throughout Chicago’s North Shore.
SALES AND CONSTRUCTION
The most notable sale was VentureOne’s disposition of 1817 Kenosha Road in Zion to Nova
Manufacturing for $30.53 per square-foot. VentureOne, an active value-add buyer is under contract
to acquire a 26 year old 60,000 square-foot Class B building at 1070 Northpoint Boulevard in
Waukegan. Bridge Development completed two single load speculative buildings on Park Avenue in
Libertyville. The larger building will be 220,500 square feet and sits adjacent to a 185,670 squarefoot facility. In Waukegan, Bridge Development is doing sitework on BridgePoint North, the
redevelopment of the former Cardinal Health campus. The 225 acre site can accommodate up to
2.8 million square feet of new product.
ECONOMIC OUTLOOK
The Lake County industrial market benefits from the pharmaceutical and health related companies
which call the region home. The area has a unique advantage due to the affluent population
dynamics and the readily accessible, skilled labor force. Lake County exceeds the nation and Illinois’
education attainment at the high school, bachelor’s degree, and graduate degree levels. By raw
number, its manufacturing sector employs the most workers than any other sector. The area is not
considered a high throughput distribution market as much as the modern big box space is across the
border in Wisconsin. Developers continue to search for new land opportunities in Lake County but
larger developable parcels command a premium.
RECENT SALES COMPARABLES (sorted by square feet)
Buyer
Seller
Location
City
Size (s.f.)
Date
Price / s.f.
Nova
Venture One
1817 Kenosha Road
Zion
222,750
6/1/15
$30.53
High Street Realty Company
American Igloo Builders
1811-1821 Industrial Drive
Libertyville
85.000
4/24/15
$46.29
Black Dog Racing
Exeter Property Group
600 Barclay Boulevard
Lincolnshire
57,235
5/22/15
$65.13
RECENT LEASE COMPARABLES (sorted by square feet)
Tenant
Type
Location
City
Size (s.f.)
Paris Presents
Renewal
3800 Swanson Court
Gurnee
223,760
Veritas Document Solutions
New lease
911 Commerce Drive
Buffalo Grove
120 803
Yaskawa
Renewal
1055 Johnson Drive
Buffalo Grove
100,839
BMC/Visual Park
New lease
3540 Amherst Parkway
Waukegan
87,000
10
Lake County Submarket News
SUBMARKET MAP
SUBMARKET CHARACTERISTICS
•
•
Higher ratio of specialized manufacturing
Strong concentration of healthcare, medical
device and life sciences companies
•
•
Dated, less energy efficient and design
constrained product.
Land constrained
SUBMARKET STATISTICS
Total
inventory
(s.f.)
Total
vacancy
(%)
Total
availability
(%)
Q2 direct net
absorption
(s.f.)
YTD total net
absorption
(s.f)
Warehouse / Distribution
35,250,565
10.5%
15.1%
-23,236
294,528
$4.63
0
860,488
Manufacturing
24,447,973
5.2%
10.2%
-257,199
-449,020
$6.00
0
0
Flex / R&D
6,471,452
11.6%
18.4%
-11,500
-35,697
$9.07
0
0
Total Industrial
70,673,254
7.9%
12.4%
-128,953
21,873
$4.94
0
860,488
Property type
Average direct
Under
YTD
asking rent construction
completions
($ p.s.f.)
(s.f.)
©2015 Jones Lang LaSalle IP, Inc. All rights reserved. No part of this publication may be reproduced by any means, whether graphically, electronically, mechanically or otherwise howsoever, including without limitation
photocopying and recording on magnetic tape, or included in any information store and/or retrieval system without prior written permission of Jones Lang LaSalle. The information contained in this document has been compiled
from sources believed to be reliable. Jones Lang LaSalle or any of their affiliates accept no liability or responsibility for the accuracy or completeness of the information contained herein and no reliance should be placed on the
information contained in this document.
11
North Cook I Submarket News
Second Quarter 2015
LEASE ACTIVITY
The most significant lease of the second quarter was US Auto Force’s commitment to take
68,000 square feet in Panattoni’s spec building at 7711 Gross Point Road for 130 months.
Panattoni is rumored to be in negotiation with another user to fill the remaining 41,000
square feet in the building. Also in Skokie, ComEd leased 14,000 square feet for equipment
and material storage at 5900 W Howard. Earlier in the year, Skokie, Cabot and Seefried
Properties secured a prelease commitment from Thermal Care for 135,277 square feet
within their new 217,064 square-foot building. This project will deliver in March of 2016.
KEY MARKET INDICATORS
40,902,489
Total direct vacancy (%)
6.3%
Total vacancy (%)
6.8%
Demand
Total net absorption (s.f.)
568,894
YTD net absorption (s.f.)
444,271
Pricing
Average rental rate (nnn)
$6.38
Supply
Total inventory (s.f.)
RENTS
Strong demand and limited available product has pushed vacancy downward to 6.8
percent. As a result, rental rates currently stand at $6.38 as tenant demand and improving
economic conditions have tightened available supply. Demand will focus on upgraded,
modern buildings in close proximity to the Edens and Tristate expressways as tenants look
to service their customers throughout the greater Chicago metro area.
12-month percent change
21.06%
Arrows represent change from prior quarter
NET NEW SUPPLY, NET ABSORPTION, VACANCY
s.f.
Net new supply
600,000
Net absorption
Total vacancy
8.6%
400,000
200,000
7.4%
0
-200,000
6.2%
-400,000
-600,000
-800,000
5.0%
2007
2008
2009
2010
2011
2012
2013
2014
2Q15
SALES AND CONSTRUCTION
First American Properties sold a 78,000 square-foot building at 7550 N Croname Road to
Specialty Print Communications for $43.22 per square foot. In Niles. Jeron Electronic
Systems acquired a 52,000 square-foot building at 7501 N Natchez from SJJ Properties for
just under $50 per square-foot. Andrew Spatz acquired a 31,570 square-foot building at
1125 Hartrey Avenue in Evanston from Bernard Food for $26.61 per square-foot. In
construction news, Scannell completed a 306,000 square-foot build to suit for Fedex at
5959 W Howard Street in Niles. This facility will join the 15 existing FedEx facilities serving
Chicagoland.
AVERAGE RENTAL RATE
$7.00
$6.50
$6.00
$5.50
$5.00
$4.50
$4.00
$3.50
$3.00
$2.50
$2.00
$6.38
$4.92
2007
$5.29
$5.35
2008
2009
$5.05
$5.09
$5.17
$5.21
$5.29
2010
2011
2012
2013
2014
2Q15
ECONOMIC OUTLOOK
The large number of healthcare and life sciences firms in North Cook County as well as in
the surrounding northern suburbs continues to drive a considerable amount of real estate
demand. High tech manufacturing for electronics also remains a key aspect of the
industrial market buoyed by the excellent demographics and highly educated workforce.
With deal volume and market pricing returning to levels seen in the last market peak
investors with well located Class A and functional Class B space have the ability to push
rents.
RECENT SALES COMPARABLES (sorted by square feet)
Buyer
Seller
Address
City
Size (s.f.)
Date
Price / s.f.
Specialty Print Communications
First American Properties
7550-7570 N Croname Road
Niles
78,091
5/5/15
$43.22
Jeron Electronic Systems
SJJ Properties
7501 N Natchez Avenue
Niles
53,328
6/17/15
$49.69
TRV Properties
Undisclosed
7777 N Merrimac Avenue
Niles
42,500
4/15/15
$51.59
RECENT LEASE COMPARABLES (sorted by square feet)
Tenant
Type
Location
City
US Auto Force
New Lease
7711 Gross Point Rd
Skokie
Size (s.f.)
68,203
Turner Acceptance Corp
Renewal
5900 W Howard Street
Skokie
40,816
Key, Inc.
New lease
6235 W Howard Street
Skokie
29,697
ComEd
New lease
5900 W Howard Street
Skokie
14,000
12
North Cook I Submarket News
SUBMARKET MAP
SUBMARKET CHARACTERISTICS
•
•
Higher ratio of manufacturing
Few bulk distribution spaces
•
•
Higher ratio of flex
Highly educated workforce
SUBMARKET STATISTICS
Total
inventory
(s.f.)
Total
vacancy
(%)
Total
availability
(%)
Q2 total net
absorption
(s.f.)
YTD 2015 total
net absorption
(s.f.)
Warehouse / Distribution
22,489,197
8.3%
12.4%
-28,869
-243,224
$6.83
217,064
306,500
Manufacturing
13,342,051
5.6%
10.4%
399,900
480,687
$4.50
0
0
Flex / R&D
6,345,886
9.4%
11.1%
62,788
43,725
$7.62
0
0
Total Industrial
40,902,489
6.8%
11.2%
376,194
251,571
$6.38
217,064
306,500
Property type
Average direct
Under
YTD
asking rent construction
completions
($ p.s.f.)
(s.f.)
©2015 Jones Lang LaSalle IP, Inc. All rights reserved. No part of this publication may be reproduced by any means, whether graphically, electronically, mechanically or otherwise howsoever, including without limitation
photocopying and recording on magnetic tape, or included in any information store and/or retrieval system without prior written permission of Jones Lang LaSalle. The information contained in this document has been compiled
from sources believed to be reliable. Jones Lang LaSalle or any of their affiliates accept no liability or responsibility for the accuracy or completeness of the information contained herein and no reliance should be placed on the
information contained in this document.
13
North DuPage I Submarket News
Second Quarter 2015
LEASING ACTIVITY
The most notable lease inked in the second quarter was Architectural Office Environments’
commitment to prelease 154,000 square feet at 501 S Gary being developed by LIM and
Panattoni. This 125 month commitment allows the office furniture supplier to customize their
building finishes and secure a high image facility right off the Elgin O’Hare Expressway. In
Addison, an expansion by Chamberlain Group into Lincoln Property’s 1350 Greenbriar Drive
fills the entire 120,000 square foot building. Summit Marketing committed to a 103 month
lease with Prologis at 280 Madsen in Bloomingdale for 88,000 square feet.
KEY MARKET INDICATORS
Supply
Demand Pricing
Total inventory (s.f.)
75,404,285
Total direct vacancy (%)
6.0%
Total vacancy (%)
6.1%
Total net absorption (s.f.)
410,393
YTD net absorption (s.f.)
1,081,515
Average rental rate (nnn)
$5.08
12-month percent change
19.2%
Arrows represent change from prior quarter
NET NEW SUPPLY, NET ABSORPTION, VACANCY
s.f.
2,500,000
Net new supply
Net absorption
Total vacancy
2,000,000
12.6%
11.4%
1,500,000
1,000,000
10.1%
500,000
8.8%
0
5.3
-500,000
7.5%
-1,000,000
6.3%
-1,500,000
-2,000,000
5.0%
2007
2008
2009
2010
2011
2012
2013
2014
2Q15
AVERAGE ASKING RENTAL RATE
$5.50
$5.12
$5.00
$5.08
$5.02
$4.50
$4.50
$4.27
$4.25
$4.25
2010
2011
2012
$4.36
$4.30
2013
2014
$4.00
$3.50
$3.00
$2.50
$2.00
2007
2008
2009
2Q15
RENTS
Annualized rents stand at $5.08 per square-foot and are forecasted to rise as vacancy across
the submarket hovers in historically low territory just above six percent. Within the North
DuPage submarket, the limited availability of large Class A space is forcing users to look
northwest towards Elgin or south towards Aurora where equally tight conditions exist. Just
over the county line in Streamwood, OPUS is on the verge of launching a 423,672 square foot
spec building targeted towards large format Central DuPage users.
SALES AND CONSTRUCTION
As part of Duke Realty’s disposition of a Midwest Class B Portfolio, Exeter acquired 8
buildings totaling 700,000 square feet in Chicago’s western suburbs. This portfolio traded at a
7.6 cap. Within the Central DuPage market Exeter’s newest acquisitions include 75,538
square feet at 189-199 Easy Street in Carol Stream. Panattoni and LaSalle Investment
Management will be putting up another speculative building on Gary Avenue in Roselle of
approximately 140,000 square feet. The site has been graded and vertical construction is
underway. Also on the design-build side, DCT Industrial will be erecting a 350,000 squarefoot facility for CoreCentric at 191 North Avenue in Carol Stream.
ECONOMIC OUTLOOK
DuPage County boasts the lowest unemployment rate among Cook County and the collar
counties. The area relies on machinery, computers and electronics, and chemical production
as primary exports. Major employers in DuPage include Dover Corp, Navistar, AAR Corp,
Hub Group and Castle Metals. The Central DuPage market has only two Class A spaces
over 250,000 square feet available; 350,000 square feet at 135 E Elk Trail in Carol Stream
and 260,000 square feet at 1820-1920 Internationale Boulevard in Glendale Heights.
RECENT SALES COMPARABLES (sorted by square feet)
Buyer
Seller
Location
City
Size (s.f.)
High Street
Schierer Nancy
6350 Church Road
Exeter Property Group
Duke Realty Corporation
189-199 Easy St (Part of Portfolio)
High Street Realty Company, LLC
PPP Inc.
490 Windy Point Drive
Glendale Heights
Castle Metal Products
John Sakash Company,
1947 Quincy Court
Glendale Heights
Date
Price / s.f.
Hanover Park
83,666
6/15/15
$69.32
Carol Stream
75,538
4/8/15
$82.08
44,300
6/1/15
$56.09
23,000
4/28/15
$55.43
RECENT LEASE COMPARABLES (sorted by square feet)
Tenant
Type
Location
City
Size (s.f.)
Architectural Office Environments
Pre-lease
501 S Gary Avenue
Roselle
154,126
Chamberlain Group
Expansion
1350 N Greenbriar Drive
Addison
120,727
Summit Marketing
New lease
280 Madsen Drive
Bloomingdale
88,098
Midwest Cortland
New lease
235 Laura Drive
Addison
13,260
14
North DuPage I Submarket News
SUBMARKET MAP
SUBMARKET CHARACTERISTICS
•
Tight market overall with mainly mid-sized users
•
Smaller footprints
•
Some tenant migration out of O’Hare / Cook County
•
Strong labor pool
SUBMARKET STATISTICS
Total
inventory
(s.f.)
Total
vacancy
(%)
Total
availability
(%)
Q2 net
absorption
(s.f.)
YTD total net
absorption
(s.f)
Warehouse / Distribution
50,896,431
7.2%
9.6%
437,792
904,891
$5.11
290,925
0
Manufacturing
-24,249
-32,200
$4.25
0
0
Property type
Average direct
Under
YTD
asking rent construction
completions
($ p.s.f.)
(s.f.)
13,978,378
5.2%
7.5%
Flex / R&D
3,799,828
8.4%
12.5%
5,625
4,035
$9.75
0
0
Total Industrial
75,404,285
6.1%
8.6%
410,393
1,081,515
$5.08
290,925
0
©2015 Jones Lang LaSalle IP, Inc. All rights reserved. No part of this publication may be reproduced by any means, whether graphically, electronically, mechanically or otherwise howsoever, including without limitation
photocopying and recording on magnetic tape, or included in any information store and/or retrieval system without prior written permission of Jones Lang LaSalle. The information contained in this document has been compiled
from sources believed to be reliable. Jones Lang LaSalle or any of their affiliates accept no liability or responsibility for the accuracy or completeness of the information contained herein and no reliance should be placed on the
information contained in this document.
15
O’Hare I Submarket News
Second Quarter 2015
LEASING ACTIVITY
The most notable new deal of the second quarter was the Pet Food Experts 98,785 square
feet lease in Brennan’s newly constructed warehouse located at 1780 Birchwood Avenue in
Des Plaines . The arrangement leaves approximately 40,000 square feet available within
the single load Class A building. Also in Des Plaines, Lear Jet leased 95,000 with ML
Realty at 251 Wille Road. NNR Logistics expanded by 30,000 square feet filling the
remainder of Bridge Development’s 2201 Lunt in Elk Grove Village.
KEY MARKET INDICATORS
Supply
Demand Pricing
Total inventory (s.f.)
98,241,617
Total direct vacancy (%)
6.0%
Total vacancy (%)
6.5%
Total net absorption (s.f.)
627,158
YTD net absorption (s.f.)
878,056
Average rental rate (nnn)
$5.46
RENTS
Asking rents in the O’Hare submarket are among the strongest in the Chicago metro area at
$5.46 per square-foot. Demand remains strong as the submarket’s unique attributes
attract a diverse pool of users from air freight and logistics users, food distributors, and
manufacturing and assembly operations.
12-month percent change
1.3%
Arrows represent change from prior quarter
NET NEW SUPPLY, NET ABSORPTION, VACANCY
s.f.
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
-500,000
-1,000,000
-1,500,000
-2,000,000
-2,500,000
Net new supply
Net absorption
Total vacancy
15.1%
13.5%
11.8%
10.1%
8.4%
6.7%
5.0%
2007 2008 2009 2010 2011 2012 2013 2014 2Q15
AVERAGE ASKING RENTAL RATE
$7.00
$6.50
$6.00
$5.50
$5.00
$4.50
$4.00
$3.50
$3.00
$2.50
$2.00
SALES AND CONSTRUCTION
As part of Prologis’ purchase of KTR, approximately 9.5 million square feet of Illinois real
estate traded hands. Already positioned as the submarket’s largest owner, the acquisition of
KTR’s sizable O’Hare footprint will significantly bolster Prologis’ leading market share .
Liberty Property Trust has the walls and roof completed on their 233,000 square-foot
speculative warehouse in Des Plaines. This facility is unique in that it offers toll way
visibility and significantly more parking than other new developments in the O’Hare
submarket where land is at a premium. Also in Des Plaines, IAC is developing an $11
million build-to-suit project at 200 E Touhy Avenue for SkyChefs. DCT is on track for late
2015 completion of their 112,000 square-foot speculative building at 2200 Arthur Avenue in
Elk Grove.
$6.61
$6.11
2007
2008
$5.25
$5.27
$5.17
2009
2010
2011
$5.37
$5.28
$5.27
2012
2013
2014
$5.46
2Q15
ECONOMIC OUTLOOK
The O’Hare submarket area benefits from its proximity to rail, road, and air transportation
connections. Having been in the doldrums for the past several years, the air cargo sector
may be staging a moderate comeback. Although shippers prefer cheaper modes of
transportation, perishables, food, and direct-to-consumer products are driving demand for
air cargo particularly in peak seasons.
RECENT SALES COMPARABLES
Buyer
Seller
Location
City
Size (s.f.)
Date
Price / s.f.
Trimaco, LLC
Summit Investment Management
1221 Landmeier Road
Elk Grove Village
118,388
4/15/15
$25.97
Savage Bros. Co.
FAIP North America, Inc.
1825 Greenleaf Avenue
Elk Grove Village
81,544
6/17/15
$37.22
Exeter
Duke
751 Expressway
Itasca
63,305
4/13/15
$85.30
RECENT LEASE COMPARABLES
Tenant
Type
Address
City
Size (s.f.)
Pet Food Experts
New lease
1780 Birchwood Drive
Des Plaines
98,785
Lear Jet
New lease
251 Wille Road
Des Plaines
95,000
Ropak Central
New lease
1100-1300 Arthur Avenue
Elk Grove Village
46,099
NNR Global Logistics
Expansion
2201 Lunt Avenue
Elk Grove Village
30,000
16
O’Hare I Submarket News
SUBMARKET MAP
SUBMARKET CHARACTERISTICS
•
•
Higher ratio of heavy and advanced manufacturing
Fewer available bulk distribution spaces
•
Elk Grove Village is home to the largest industrial
park in North America
SUBMARKET STATISTICS
Total
inventory
(s.f.)
Total
vacancy
(%)
Total
availability
(%)
Q2 net
absorption
(s.f.)
YTD total net
absorption
(s.f)
Warehouse / Distribution
64,519,446
7.5%
11.5%
408,907
580,870
$5.46
1,102,871
0
Manufacturing
23,534,110
5.4%
12.9%
198,251
272,919
$5.25
0
0
Flex / R&D
6,695,102
13.6%
16.7%
43,052
36,469
$8.10
0
0
Total Industrial
98,241,617
6.5%
11.2%
627,158
878,056
$5.46
1,102,871
0
Property type
Average direct
Under
YTD
asking rent construction
completions
($ p.s.f.)
(s.f.)
©2015 Jones Lang LaSalle IP, Inc. All rights reserved. No part of this publication may be reproduced by any means, whether graphically, electronically, mechanically or otherwise howsoever, including without limitation
photocopying and recording on magnetic tape, or included in any information store and/or retrieval system without prior written permission of Jones Lang LaSalle. The information contained in this document has been compiled
from sources believed to be reliable. Jones Lang LaSalle or any of their affiliates accept no liability or responsibility for the accuracy or completeness of the information contained herein and no reliance should be placed on the
information contained in this document.
17
West Cook I Submarket News
Second Quarter 2015
LEASE ACTIVITY
The most notable least signed to date in 2015 occurred in a deal between Paper Source
and First Industrial for 150,316 square feet at 7801 Industrial Court in Forest Park. RRM
signed a commitment for 66,000 square feet at 6600 River Road in Hodgkins. In the first
quarter Ryder Dickson’s renewed a 80,000 square-foot lease at 815 25th Avenue in
Maywood.
RENTS
Although concerns regarding high Cook County taxes remain a significant variable in lease
negotiation and site selection, fundamentals have continued to exhibit steady improvement
over the past two years driving rents upward. The delivery of 888,896 square feet of Class
A speculative space has resulting in a 2.0 percent bump in the submarket vacancy rate.
HIGHLIGHTS
KEY MARKET INDICATORS
68,359,201
Total direct vacancy (%)
8.8%
Total vacancy (%)
8.8%
Demand
Total net absorption (s.f.)
-47,928
YTD net absorption (s.f.)
-291,889
Pricing
Average rental rate (nnn)
$7.02
Supply
Total inventory (s.f.)
12-month percent change
16.5%
Arrows represent change from prior quarter
SALES AND CONSTRUCTION
In Franklin Park, CenterPoint sold a 264,072 industrial building to Edsal Manufacturing for
$21.97 per square-foot. Three tenants occupied 76 percent of the building at the time of
purchase. The Chicago-based shelving manufacturer will utilize the remaining space at
2425 Edgington Street to support expanding production operations throughout the region. In
investment sale news, SJS Realty acquired an 84,600 square foot multitenant building at
5109 W Lake in Melrose Park. The fully occupied building traded at $50.25 per square foot
with a cap rate of 8.27 percent. Dermody Properties in partnership with AEW delivered two
speculative buildings on 47th Street right off the Stevenson Expressway. The neighboring
buildings are 312,000 and 351,900 square feet respectively. Also in McCook, Bridge
Development completed a 226,196 square-foot speculative project at 8401 West 47th
Street. Bridge, one of the most active developers in Chicago, continues construction of a
588,284 square-foot cross dock spec at the site of a former Dominick’s grocery distribution
center in Northlake.
NET NEW SUPPLY, NET ABSORPTION, VACANCY
Net new supply
s.f.
3,000,000
Net absorption
Total vacancy
12.0%
2,500,000
11.0%
2,000,000
10.0%
1,500,000
9.0%
1,000,000
8.0%
500,000
0
7.0%
-500,000
6.0%
-1,000,000
5.0%
2007 2008 2009 2010 2011 2012 2013 2014 2Q15
AVERAGE RENTAL RATE
ECONOMIC OUTLOOK
While McCook is comprised of largely modern Class A facilities, many municipalities inside
the I-294 ring face a shortage of 50,000-75,000 square-foot space. Demand across the infill
markets continues to grow as firms seek access to the deep and diverse Cook County labor
shed as the ability to retain a skilled and reliable workforce moves to the forefront of the site
selection decision making process.
$8.00
$7.02
$7.00
$6.00
$5.00
$5.89
$5.83
2013
2014
$5.25
$4.48
$4.39
$4.33
2007
2008
2009
$4.62
$4.71
2010
2011
$4.00
$3.00
$2.00
2012
2Q15
RECENT SALES COMPARABLES (sorted by square feet)
Buyer
Seller
Address
City
Size (s.f.)
Date
Price / s.f.
Edsal Manufacturing Company
CenterPoint
2425 Edgington Street
Franklin Park
264,072
05/28/2015
$21.97
SJS Realty
Gardner Place
5109 W Lake Street
Melrose Park
84,600
03/30/2015
$50.24
Top Quality Hardwood Flooring
Rent Com, Inc.
3900 River Road
Schiller Park
46,600
03/01/2015
$20.39
A & C Plastics, Inc.
Humboldt Mfg. Co.
3801 N 25th Avenue
Schiller Park
41,208
05/01/2015
$31.55
RECENT LEASE COMPARABLES (sorted by square feet)
Tenant
Type
Address
City
Size (s.f.)
Paper Source
New lease
7801 Industrial Court
Forest Park
153,316
Ryder Dickerson
Renewal
815 25h Avenue
Bellwood
80,292
RRM Transportation
New lease
6600 River Road
Hodgkins
66,000
Exegistics
New lease
3710 River Road
Franklin Park
50,000
18
West Cook I Submarket News
SUBMARKET MAP
SUBMARKET CHARACTERISTICS
•
•
Higher ratio of heavy manufacturing
Due to land constraints, fewer bulk distribution
spaces than other Chicago industrial submarkets
•
West Cook home to the BNSF Corwith and
Union Pacific Global II intermodals and UPS
Chicago Area Consolidation Hub (CACH)
SUBMARKET STATISTICS
Total
inventory
(s.f.)
Total
vacancy
(%)
Total
availability
(%)
Q2 net
absorption
(s.f.)
YTD total net
absorption
(s.f)
Warehouse / Distribution
35,818,712
11.6%
16.2%
82,373
-65,986
$7.26
588,284
888,896
Manufacturing
21,420,609
7.7%
10.0%
-148,901
-269,503
$3.85
0
0
Flex / R&D
2,810,753
5.5%
5.1%
3,834
24,334
$15.00
0
0
Total Industrial
68,359,201
8.8%
12.3%
-47,928
-291,889
$7.02
588,284
888,896
Property type
Average direct
Under
YTD
asking rent construction
completions
($ p.s.f.)
(s.f.)
©2015 Jones Lang LaSalle IP, Inc. All rights reserved. No part of this publication may be reproduced by any means, whether graphically, electronically, mechanically or otherwise howsoever, including without limitation
photocopying and recording on magnetic tape, or included in any information store and/or retrieval system without prior written permission of Jones Lang LaSalle. The information contained in this document has been compiled
from sources believed to be reliable. Jones Lang LaSalle or any of their affiliates accept no liability or responsibility for the accuracy or completeness of the information contained herein and no reliance should be placed on the
information contained in this document.
19
Southeast Wisconsin I Submarket News
Second Quarter 2015
LEASE ACTIVITY
The largest lease signed in the second quarter was a prelease commitment for CenterPoint’s
newest development in the Lakeview Business Park. Midwest Refrigerated Services which
handles OceanSpray product committed to taking 411,000 square-feet in a recently completed
spec building at 11681 88th Avenue. This transaction brings CenterPoint’s newest spec building
to full occupancy with no downtime. Uline continues to expand their footprint, recently
purchasing 200 acres from Bridge Development. The shipping and packaging products firm
intends to construct a 1.0 million square-foot distribution facility in addition to a separate 50,000
square-foot office and call center.
KEY MARKET INDICATORS
56,131,591
Total direct vacancy (%)
5.1%
Total vacancy (%)
5.1%
Demand
Total net absorption (s.f.)
1,089,462
YTD net absorption (s.f.)
1,239,331
Pricing
Average rental rate (nnn)
$3.64
Supply
Total inventory (s.f.)
12-month percent change
4.2%
Arrows represent change from prior quarter
NET NEW SUPPLY, NET ABSORPTION, VACANCY
s.f.
3,500,000
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
-500,000
-1,000,000
-1,500,000
Net new supply
Net absorption
Total vacancy
12.5%
11.0%
9.5%
8.0%
6.5%
5.0%
2007
2008
2009
2010
2011
2012
2013
2014
2Q15
AVERAGE RENTAL RATE
$4.50
$4.00
$4.03
$3.90
$3.95
$3.96
$4.05
$3.87
$3.56
$3.50
$3.49
$2.50
$2.00
2008
2009
2010
2011
2012
2013
2014
SALES AND CONSTRUCTION
The most notable investment sale was Brennan and Goldman Sachs’ disposition of two
neighboring buildings totaling 187,000 square feet to Zilber for $56 per square-foot. The
properties at 100th Street and 80th Avenue are fully leased to the Albany-Chicago Company and
were acquired as part of a 22 building portfolio from Mirvac in December 2014. WW Grainger
completed a disposition of a high image 15,000 square-foot showroom and distribution center in
the 3711 Memorial Drive in Racine for $40 per square-foot. In April, Ashley Capital broke ground
on a 374,400-square-foot speculative industrial building on Durand Avenue. In the development
pipeline, Zilber is planning on launching a 173,165-square-foot spec building in the Business
Park of Kenosha. Centerpoint has a proposed 204,397 square foot single load building at the
corner of 88th and Lakeview Parkway in Pleasant Prairie.
$3.64
$3.00
2007
RENTS
Competition remains strong among 50,000 to 100,000 square-foot standalone buildings ideal for
local users. The second main component of the demand pipeline is from corporate occupiers
seeking Class A cross dock configurations for multi-state distribution. A significant portion of the
submarket’s industrial product is either owner occupied or secured under long term build-to-suit
lease arrangements which have historically driven the market.
2Q15
ECONOMIC OUTLOOK
The advanced industries in the packaging, manufacturing, and food & beverage sector continue
to drive the bulk of the leasing and sale activity across Kenosha and Racine Counties.
Comparatively low land costs and a business-friendly policy climate draw Illinois firms north of
the border. After the recent establishment of Wisconsin as a right-to-work state, company
migrations are anticipated to escalate. Several regional and national developers continue to
move forward with preliminary land planning and site work on large scale business parks
including VentureOne, Majestic, Bridge, and H.S.A. Commercial.
RECENT SALES COMPARABLES (sorted by square feet)
Buyer
Seller
Location
City
Size (s.f.)
Date
Price / s.f.
Zilber
Brennan/Goldman Sachs
8200 100th Street &
Pleasant Prairie
186,762
5/5/15
$55.82
Kitchen Cubes
Koziol, Inc
8601 200th Avenue
Bristol
77,500
3/5/15
$18.45
JCZ Legacy Trust
Ligon Industries/Premier Aluminum
Kobe Holdings, LLC
WW Grainger
2300 South Street
3711 S Memorial Drive
Racine
Racine
75,390
15,090
5/20/15
4/16/15
$34.49
$40.42
RECENT LEASE COMPARABLES (sorted by square feet)
Tenant
Type
Location
City
Size (s.f.)
th
Uline
Build to Suit
8495 116 Street
Pleasant Prairie
520,000
Midwest Refrigerated Services
Prelease
11681 88th Avenue
Pleasant Prairie
412,000
Hospira
Extension
10501 80th Avenue
Pleasant Prairie
302,500
FNA Group
New lease
7152 72nd Avenue
Pleasant Prairie
176,433
20
Southeast Wisconsin | Submarket News
SUBMARKET MAP
SUBMARKET CHARACTERISTICS
•
•
Newer big box industrial ideal for supply chains
•
Comparatively lower land costs and pro-business climate
Attracting national attention for firms looking
to have a presence in Chicago metro area
SUBMARKET STATISTICS
Total
inventory
(s.f.)
Total
vacancy
(%)
Total
availability
(%)
Q2 net
absorption
(s.f.)
YTD total net
absorption
(s.f)
Warehouse / Distribution
29,005,592
6.5%
9.8%
611,796
774,287
$3.66
375,908
1,063,415
Manufacturing
23,534,458
3.7%
5.3%
405,677
438,521
$3.53
0
377,000
Flex / R&D
1,607,752
8.9%
13.0%
-4,577
-5,607
$8.44
0
53,680
Total Industrial
56,131,591
5.1%
7.6%
1,089,462
1,239,331
$3.64
375,908
1,494,095
Property type
Average direct
Under
YTD
asking rent construction
completions
($ p.s.f.)
(s.f.)
©2015 Jones Lang LaSalle IP, Inc. All rights reserved. No part of this publication may be reproduced by any means, whether graphically, electronically, mechanically or otherwise howsoever, including without limitation
photocopying and recording on magnetic tape, or included in any information store and/or retrieval system without prior written permission of Jones Lang LaSalle. The information contained in this document has been compiled
from sources believed to be reliable. Jones Lang LaSalle or any of their affiliates accept no liability or responsibility for the accuracy or completeness of the information contained herein and no reliance should be placed on the
information contained in this document.
21
North Kane I Submarket News
Second Quarter 2015
LEASE ACTIVITY
Lease activity has remained consistent in North Kane County with healthy growth from
local and regional firms and big box users. The largest transaction of the first half of the
year was Box Partners lease for 205,648 square feet at 2501 Galvin Drive in Elgin. The
deal brings Conor Commercials’ 343,000 square-foot speculative building, delivered 2013,
to full occupancy. Conor is currently canvasing the investment market for offers on the
building. Northern Builders is close to delivering a 50,346 square-foot build-to-suit in
Hampshire Woods Business Park for Nutriad Pet Food. This specialized food-grade
building will have 6,000 square feet of office, 7,000 square feet of production space and
parking to accommodate up to 40 employees.
KEY MARKET INDICATORS
29,746,824
Total direct vacancy (%)
9.2%
Total vacancy (%)
9.4%
Demand
Total net absorption (s.f.)
-42,476
YTD net absorption (s.f.)
28,276
Pricing
Average rental rate (nnn)
$5.87
Supply
Total inventory (s.f.)
12-month percent change
25.7%
Arrows represent change from prior quarter
NET NEW SUPPLY, NET ABSORPTION, VACANCY
Net new supply
Net absorption
Total vacancy
s.f.
2,000,000
15.0%
1,500,000
13.0%
1,000,000
11.0%
500,000
9.0%
0
7.0%
-500,000
5.0%
2007 2008 2009 2010 2011 2012 2013 2014 2Q15
AVERAGE RENTAL RATE
$6.50
$6.00
$5.87
$5.58
$5.50
$5.22
$5.19
$5.15
$5.00
$4.97
$4.97
$4.83
$4.49
$4.50
$4.00
$3.50
$3.00
$2.50
$2.00
2007
2008
2009
2010
2011
2012
2013
2014
2Q15
RENTS
Asking rents have climbed sharply as the four most recent speculative buildings in North
Kane have fully stabilized. Vacancy is trending downward as there are only six Class A
distribution buildings available on the market over 100,000 square-feet. There are three
options between 100,000 to 150,000 square-feet and three buildings between 150,000
to 300,000 square feet.
SALES AND CONSTRUCTION
The most notable investment sale in North Kane thus far in 2015 was TA Associate’s take
out of Bridge Development and Wanxiang on their newly developed 2750 Alft Lane. This
property traded for $72 per square-foot. Duke Realty completed the $43 million dollar
Weber Stephens’ 757,120-square-foot, build-to-suit industrial facility in Huntley in the first
quarter which won the NAIOP Chicago deal of the year for 2014. In Gilberts, Interstate
Partners completed a 276,000 square-foot speculative building in the Prairie Business
Park. Also of note, OPUS is nearing completion of a 42,000 square-foot manufacturing
building for King Shan. In the development pipeline, John Huang has announced plans
for an 80,000 square-foot spec building in the Randall Crossings Business Park
ECONOMIC OUTLOOK
The market between Randall Road and Route 31 in Elgin continues to be a hotbed of
activity as the bulk of the modern institutional quality assets are clustered here within
close proximity to I-90. As the Chicago industrial market rebounds a greater number of
mid-size user requirements are coming online, a niche the North Kane submarket is
ideally suited to accommodate. Tenant migration out of the tight O’Hare and Central
DuPage submarkets, should induce an uptick in leasing velocity through the second half
of 2015.
RECENT SALES COMPARABLES (sorted by square feet)
Buyer
Seller
Location
City
Size (s.f.)
Date
Price / s.f.
TA Associates
Bridge/Wanxiang
2750 Alft Lane
Elgin
225,205
1/30/15
$72.49
Stockbridge
Chicago Industrial Investments
2500 Vantage Drive
Elgin
110.292
6/4/2015
$77.07
Otto Engineering
Carlith Printing
250 Carpenters Boulevard
Carpentersville
24,250
5/29/15
$22.06
RECENT LEASE COMPARABLES (sorted by square feet)
Tenant
Type
Location
City
Size (s.f.)
BOX Partners
New lease
2501 Galvin Drive
Elgin
205,648
PSAV
Expansion
2800-2880 Galvin Drive
Elgin
47,805
Wisdom Adhesives
New Lease
350-370 River Ridge Road
Elgin
39,131
Centimark Corporation
New Lease
200-220 Corporate Drive
Elgin
34,449
22
North Kane I Submarket News
SUBMARKET MAP
SUBMARKET CHARACTERISTICS
•
High ratio of flex, R&D due to the suburban
market characteristics of the area
•
Large number of owner-occupiers
•
Product in close proximity to full interchanges
along I-90 commands a premium
SUBMARKET STATISTICS
Total
inventory
(s.f.)
Total
Vacancy
(%)
Total
availability
(%)
Q2 total net
absorption
(s.f.)
YTD total net
absorption
(s.f)
Warehouse / Distribution
17,954,450
8.2%
11.0%
-26,917
69,032
$5.90
50,346
1,033,120
Manufacturing
6,593,625
16.3%
18.4%
2,000
-29,520
$5.60
42,000
0
Property type
Average direct
Under
YTD
asking rent construction
completions
($ p.s.f.)
(s.f.)
Flex / R&D
3,634,949
6.2%
7.1%
28,341
84,909
$9.89
0
0
Total Industrial
29,746,824
9.4%
12.0%
-42,476
28,276
$5.87
92,346
1,033,120
©2015 Jones Lang LaSalle IP, Inc. All rights reserved. No part of this publication may be reproduced by any means, whether graphically, electronically, mechanically or otherwise howsoever, including without limitation
photocopying and recording on magnetic tape, or included in any information store and/or retrieval system without prior written permission of Jones Lang LaSalle. The information contained in this document has been compiled
from sources believed to be reliable. Jones Lang LaSalle or any of their affiliates accept no liability or responsibility for the accuracy or completeness of the information contained herein and no reliance should be placed on the
information contained in this document.
23
Northwest Indiana I Submarket News
Second Quarter 2015
LEASE ACTIVITY
The most notable deal of 2015 was Hosely International’s lease renewal and reduction of
space to 211,500 square feet with Venture One at 6750 Daniel Burnham Drive. The
remaining 165,000 square feet of space in the balance of the building is the only other
existing Class A vacancy in Northwest Indiana over 100,000 square feet. Insulation
Fabricators came to terms on a 152,000 square-foot renewal with Industrial Realty Group for
84 months at 2501 W 165th Street in Hammond. Economic development authorities have
reported that a deal fell through between Industrial Recycling Group and TCB Development to
lease 575,000 square-feet at 6515 Ameriplex Drive in Portage.
KEY MARKET INDICATORS
42,491,633
Total direct vacancy (%)
6.2%
Total vacancy (%)
6.2%
Demand
Total net absorption (s.f.)
61,426
YTD net absorption (s.f.)
143,460
Pricing
Average rental rate (nnn)
$3.51
Supply
Total inventory (s.f.)
12-month percent change
7.0%
Arrows represent change from prior quarter
NET NEW SUPPLY, NET ABSORPTION, VACANCY
s.f.
2,000,000
1,800,000
1,600,000
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
Net new supply
Net absorption
Total vacancy
12.4%
10.5%
8.7%
6.8%
5.0%
2007
2008
2009
2010
2011
2012
2013
2014
2Q15
AVERAGE RENTAL RATE
$4.00
$3.80
$3.60
$3.40
$3.20
$3.00
$2.80
$2.60
$2.40
$2.20
$2.00
$3.77
$3.66
$3.38
$3.54
$3.38
$3.14
2007
2008
2009
2010
2011
$3.51
$3.29
$3.02
2012
2013
2014
2Q15
RENTS
Vacancy has fallen dramatically in Northwest Indiana and at $3.51 a square foot, the
submarket has some of the most attractive lease rates in the Chicago tri-state area. The
Northwest Indiana market has tightened considerably with limited availability in the modern
business parks for product featuring high ceilings, ESFR sprinklers and ample loading
capacity.
SALES AND CONSTRUCTION
Venture One acquired a 123,000 square-foot Class A building at 6525 Daniel Burnham Drive
in the Ameriplex at the Port in Portage. This was a distressed sale for $3.4 million and the
building is 50% occupied by three tenants with three spaces left to lease. Exeter acquired
5900 Carlson Avenue, a Class B building, as part of a four building portfolio sold by JP
Morgan at a 7.5 cap. This 157,000 square-foot building is fully leased to Manufacturing
Solutions International through September 2016. In construction news, Urschel Laboratories
completed a 350,000 square-foot manufacturing facility in Chesterton and in Portage,
MonoSol is nearing completion of a 300,000 square-foot manufacturing facility. Construction
is underway on a 159,813 square-foot speculative building by Becknell Industrial at
NorthWind Crossings in Hobart which is set to deliver in early 2016. Also in NorthWind
Crossings, Sunbelt Rentals took delivery of an 18,000 square-foot special purpose
construction equipment rental depot with ample outside storage.
ECONOMIC OUTLOOK
Lack of new supply and increased industrial demand from support businesses serving the
metals, petrochemical, power, steel industries in Northwest Indiana is helping to drive positive
net absorption of 143,000 square feet through the first half of 2015. As availabilities continue
to tighten, expect to see upward pressure on rents and more interest from investors like
VentureOne who can reposition and lease up struggling buildings.
RECENT SALES COMPARABLES (sorted by square feet)
Buyer
Seller
T&B Tube Company
Christian & John Sterling
Location
4000 7th Avenue
City
Gary
Size (s.f.)
196,000
Date
3/13/15
Price / s.f.
$11.22
Exeter
JP Morgan
5900 Carlson Avenue
Portage
157,120
4/15/15
$45.32
VentureOne
US Bank
6525 Daniel Burnham Drive
Portage
122,812
4/24/15
$27.87
RECENT LEASE COMPARABLES (sorted by square feet)
Tenant
Edsal Manufacturing
Type
New lease
Location
700 Chase Avenue
City
Gary
Size (s.f.)
200,000
Insulation Fabricators
Renewal
2051 W 165th Street
Hammond
152,462
Rockwell Automation
Renewal
225 W 45Th Street
Munster
45,000
24
Northwest Indiana I Submarket News
SUBMARKET MAP
SUBMARKET CHARACTERISTICS
•
More measured in its lease velocity compared to
other Chicago area submarkets
•
Heaviest, traditional industrial users north of I-90
•
Limited Class A warehouse/distribution and flex/
R&D product due to the market being traditional
heavy industrial but remains cost effective
SUBMARKET STATISTICS
Total
inventory
(s.f.)
Total
vacancy
(%)
Total
availability
(%)
Q1 total net
absorption
(s.f.)
YTD total net
absorption
(s.f)
Warehouse / Distribution
18,060,550
6.6%
13.4%
200,321
210,775
$4.00
0
0
Manufacturing
16,978,936
5.9%
5.7%
-137,805
-135,805
$2.51
300,000
350,000
Flex / R&D
2,843,626
4.8%
13.4%
5,520
4,780
$7.33
0
0
Total Industrial
42,491,633
6.2%
9.0%
61,426
143,360
$3.51
300,000
350,000
Property type
Average direct
Under
YTD
asking rent construction
completions
($ p.s.f.)
(s.f.)
©2015 Jones Lang LaSalle IP, Inc. All rights reserved. No part of this publication may be reproduced by any means, whether graphically, electronically, mechanically or otherwise howsoever, including without limitation
photocopying and recording on magnetic tape, or included in any information store and/or retrieval system without prior written permission of Jones Lang LaSalle. The information contained in this document has been compiled
from sources believed to be reliable. Jones Lang LaSalle or any of their affiliates accept no liability or responsibility for the accuracy or completeness of the information contained herein and no reliance should be placed on the
information contained in this document.
25
South Chicago I Submarket News
Second Quarter 2015
LEASE ACTIVITY
The most significant new lease of the first half of 2015 was FedEx Ground committing to
Scannell Properties for a 219,858 square-foot build-to-suit at 3000 South Damen Avenue. This
new facility, on 41.3 acres, will feature immediate access to the I-55 Stevenson Expressway.
This facility will join 15 existing FedEx facilities serving Chicagoland. In another project,
Panattoni is seeking tenants for a 316,680 square foot proposed building at 3348 S Pulaski
Road. Competing with Panattoni is a 250,000 square foot proposed spec building at 2302 S
Paulina being developed by Clarius in partnership with Wanxiang.
KEY MARKET INDICATORS
109,226,182
Total direct vacancy (%)
8.3%
Total vacancy (%)
8.3%
Demand
Total net absorption (s.f.)
761.788
YTD net absorption (s.f.)
418,304
Pricing
Average rental rate (nnn)
$5.05
Supply
Total inventory (s.f.)
12-month percent change
15.0%
Arrows represent change from prior quarter
NET NEW SUPPLY, NET ABSORPTION, VACANCY
s.f.
2,000,000
Net new supply
Net absorption
Total vacancy
11.4%
RENTS
Asking rents in the South Chicago submarket rose to $5.05 per square foot indicating sizable
growth from 2014. Across the submarket, figures point to increasing demand across the south
side as the infill locations in the market lend themselves well to specific types of users
dependent on skilled labor and access to public transit linkages. Rising property values and
recent trends of redevelopment across the city could very well factor into landlord decisions to
raise rents.
1,500,000
1,000,000
500,000
8.2%
0
-500,000
-1,000,000
-1,500,000
-2,000,000
5.0%
2007
2008
2009
2010
2011
2012
2013
2014
2Q15
AVERAGE RENTAL RATE
$5.50
$5.05
$5.00
$4.50
$4.00
$3.94
$4.16
$4.27
$4.28
2008
2009
2010
$4.46
$4.55
2012
2013
$4.39
$4.00
$3.50
$3.00
$2.50
$2.00
2007
2011
2014
2Q15
SALES AND CONSTRUCTION
The most notable investment sale in South Chicago was AAG’s acquisition of a 128,200
square foot freezer cooler facility at 2500 S Damen for $257.41 per square foot. The Class A
facility, built in 2003, features 6.6 million cubic square feet of freezer space and is fully
occupied by Preferred Freezer Services. A fully vacant warehouse at 5000 S Hoffman traded
for the second time in 2015 after being acquired by Sitex last January. Brite Logistics
purchased the 128,100 square foot facility for $39.03 per square foot and intends to utilize 100
percent of the space following renovations scheduled to be completed later this year. Unilever,
maker of Hellman’s plans to build an 196,000 square-foot mayonnaise factory and distribution
center at 28th and Kilbourn.
ECONOMIC OUTLOOK
The South Chicago market is considerably stronger than the north but lags the overall market
as a whole The south side of the city, traditionally an industrial stronghold, is widely know to
have been plagued by years of decline. Much of the building stock is obsolete with lower
ceiling heights, difficult egress, and limited land for trailer and vehicle parking. However,
investors with optimally located modern assets should continue to see their properties
outperform the overall submarket.
RECENT SALES COMPARABLES (sorted by square feet)
Buyer
Seller
Location
City
Size (s.f.)
Date
Price / s.f.
Tricor Pacific Capital
Arbor Investments
3700 S Kedzie Avenue
Chicago
160,000
04/24/2015
$62.50
AAG
Romel Enterprises
2500 S Damen Avenue
Chicago
128,200
05/28/2015
$257.41
Brite Logistics
Sitex Group
5000 S Homan Avenue
Chicago
128,100
06/26/2015
$39.03
Balton Corporation
Structured Development
1001 E 99th Street
Chicago
104,158
02/25/2015
$23.04
RECENT LEASE COMPARABLES (sorted by square feet)
Tenant
Type
Location
FedEx Ground
Build-to-Suit
3000 S Damen Avenue
PECO Pallet
New lease
th
2924 E 126 Street
th
City
Size (s.f.)
Chicago
219,858
Chicago
194,880
MWD Logistics
Expansion/renewal
1400-1580 E 97 Place
Chicago
115,200
Chef’s Warehouse
New lease
2801 S Western Avenue
Chicago
108,397
26
South Chicago | Submarket News
SUBMARKET MAP
SUBMARKET CHARACTERISTICS
•
Higher ratio of manufacturing
•
Limited bulk distribution spaces
•
Users in close proximity to urban
core customers and suppliers
SUBMARKET STATISTICS
Total
inventory
(s.f.)
Total
vacancy
(%)
Total
availability
(%)
Q2 net
absorption
(s.f.)
YTD total net
absorption
(s.f)
Warehouse / Distribution
45,167,354
11.7%
16.3%
374,988
80,661
$4.53
0
0
Manufacturing
45,318,165
5.5%
8.7%
270,200
137,593
$11.51
0
0
Flex / R&D
5,014,835
13.2%
15.4%
-22,801
-68,386
$9.22
0
0
109,226,182
8.3%
11.8%
761,788
418,304
$5.05
0
0
Property type
Total Industrial
Average direct
Under
YTD
asking rent construction
completions
($ p.s.f.)
(s.f.)
©2015 Jones Lang LaSalle IP, Inc. All rights reserved. No part of this publication may be reproduced by any means, whether graphically, electronically, mechanically or otherwise howsoever, including without limitation
photocopying and recording on magnetic tape, or included in any information store and/or retrieval system without prior written permission of Jones Lang LaSalle. The information contained in this document has been compiled
from sources believed to be reliable. Jones Lang LaSalle or any of their affiliates accept no liability or responsibility for the accuracy or completeness of the information contained herein and no reliance should be placed on the
information contained in this document.
27
Industrial Statistics
Chicago | Q2 2015
Inventory
(s.f.)
Quarterly
total net
absorption
(s.f.)
YTD
total net
absorption
(s.f.)
YTD
total net
absorption
(% of stock)
Total
vacancy
(%)
Total
availability
(%)
Average
total asking
rent
($ p.s.f.)
Quarterly
completions
(s.f.)
YTD
completions
(s.f.)
Under
construction
(s.f.)
Lake County
Warehouse / Distribution
Manufacturing
General
Total industrial
Flex / R&D
35,250,565
24,447,973
10,974,716
70,673,254
6,471,452
20,868
-257,199
151,482
-84,849
-11,500
294,528
-449,020
176,365
21,873
-35,697
0.8%
-1.8%
1.6%
0.0%
-0.6%
10.5%
5.2%
5.6%
7.9%
11.6%
15.1%
10.2%
8.7%
12.4%
18.4%
$4.63
$6.00
$5.40
$4.94
$9.07
860,488
0
0
860,488
0
860,488
0
0
860,488
0
0
0
0
0
0
North Cook County
Warehouse / Distribution
Manufacturing
General
Total industrial
Flex / R&D
22,489,197
13,342,051
5,071,241
40,902,489
6,345,886
-28,869
399,900
5,163
376,194
62,788
-243,224
480,687
14,108
251,571
43,725
-1.1%
3.6%
0.3%
0.6%
0.7%
8.3%
5.6%
2.9%
6.8%
9.4%
12.4%
10.4%
8.1%
11.2%
11.1%
$6.83
$4.50
$5.73
$6.38
$7.62
306,500
0
0
306,500
0
306,500
0
0
306,500
0
217,064
0
0
217,064
0
Northwest Cook County
Warehouse / Distribution
Manufacturing
General
Total industrial
Flex / R&D
17,054,452
5,786,512
2,971,667
25,812,631
8,185,714
-49,510
12,425
-940
-38,025
-2,405
-155,275
41,354
-25,529
-139,450
-377,961
-0.9%
0.7%
-0.9%
-0.5%
-4.6%
7.3%
3.6%
10.6%
6.8%
20.1%
9.8%
12.9%
12.5%
10.8%
22.5%
$5.65
$4.53
$8.00
$5.88
$10.00
0
302,000
0
302,000
0
0
302,000
0
302,000
0
423,672
0
0
423,672
0
O'Hare
Warehouse / Distribution
Manufacturing
General
Total industrial
Flex / R&D
64,519,446
23,534,110
10,188,061
98,241,617
6,695,102
408,907
198,251
20,000
627,158
43,052
580,870
272,919
24,267
878,056
36,469
0.9%
1.2%
0.2%
0.9%
0.5%
7.5%
5.4%
3.1%
6.5%
13.6%
11.5%
12.9%
5.5%
11.2%
16.7%
$5.46
$5.21
$4.70
$5.46
$8.35
0
0
0
0
0
0
0
0
0
0
1,102,871
0
0
1,102,871
0
West Cook County
Warehouse / Distribution
Manufacturing
General
Total industrial
Flex / R&D
35,818,712
21,420,609
11,119,880
68,359,201
2,810,753
82,373
-148,901
18,600
-47,928
3,834
-65,986
-269,503
43,600
-291,889
24,334
-0.2%
-1.3%
0.4%
-0.4%
0.9%
11.6%
7.7%
1.8%
8.8%
5.5%
16.2%
10.0%
4.2%
12.3%
5.1%
$7.26
$3.85
$12.43
$7.02
$15.00
888,896
0
0
888,896
0
888,896
0
0
888,896
0
588,284
0
0
588,284
0
North Chicago
Warehouse / Distribution
Manufacturing
General
Total industrial
Flex / R&D
35,604,055
21,756,721
15,583,282
72,944,058
5,875,385
34,943
-291,309
-33,080
-289,446
-32,843
475,336
-220,495
23,744
278,585
-1,244
1.3%
-1.0%
0.2%
0.4%
0.0%
6.9%
14.2%
3.5%
8.3%
10.9%
10.3%
14.9%
6.8%
10.9%
13.9%
$12.56
$6.16
$8.21
$8.24
$12.38
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
South Chicago
Warehouse / Distribution
Manufacturing
General
Total industrial
Flex / R&D
45,167,354
45,318,165
18,740,663
109,226,182
5,014,835
374,988
270,200
116,600
761,788
-22,801
80,661
137,593
200,050
418,304
-68,386
0.2%
0.3%
1.1%
0.4%
-1.4%
11.7%
5.5%
6.7%
8.3%
13.2%
16.3%
8.7%
8.5%
11.8%
15.4%
$4.53
$11.51
$7.79
$5.05
$9.22
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Chad Buch Research Analyst
8755 W Higgins Rd Suite 750 Chicago, IL 60631 tel +1 773 458 1405 [email protected]
2015 Jones Lang LaSalle IP, Inc. All rights reserved.
28
Chicago | Q2 2015
Inventory
(s.f.)
Quarterly
total net
absorption
(s.f.)
YTD
total net
absorption
(s.f.)
YTD
total net
absorption
(% of stock)
Total
vacancy
(%)
Total
availability
(%)
Average
total asking
rent
($ p.s.f.)
Quarterly
completions
(s.f.)
YTD
completions
(s.f.)
Under
construction
(s.f.)
South Suburbs
Warehouse / Distribution
Manufacturing
General
Total industrial
Flex / R&D
44,998,235
30,975,976
14,252,239
90,226,450
2,952,962
465,625
128,937
36,627
631,189
-14,157
862,206
59,362
45,129
966,697
-5,524
1.9%
0.2%
0.3%
1.1%
-0.2%
8.9%
4.4%
4.0%
6.6%
9.7%
14.2%
6.8%
6.7%
10.5%
13.0%
$5.00
$7.47
$6.01
$5.43
$6.23
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
I-57 Corridor
Warehouse / Distribution
Manufacturing
General
Total industrial
Flex / R&D
15,714,378
4,401,494
3,858,992
23,974,864
408,336
-66,500
0
0
-66,500
-13,000
136,703
0
-21,200
115,503
-13,000
0.9%
0.0%
-0.5%
0.5%
-3.2%
12.8%
4.4%
10.0%
10.8%
9.6%
19.1%
9.2%
10.0%
15.8%
19.1%
$4.35
$1.99
$5.77
$4.55
$9.56
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
I-80 Corridor
Warehouse / Distribution
Manufacturing
General
Total industrial
Flex / R&D
44,351,053
9,030,057
3,915,699
57,296,809
842,381
97,239
-9,700
-80,078
7,461
-964
217,079
-9,700
-37,281
170,098
5,586
0.5%
-0.1%
-1.0%
0.3%
0.7%
9.3%
12.5%
7.8%
9.7%
9.0%
10.1%
6.1%
11.5%
9.5%
11.4%
$3.64
$5.10
$7.35
$3.86
$8.83
0
0
0
0
0
751,996
0
0
751,996
0
3,390,151
0
0
3,390,151
0
I-55 Corridor
Warehouse / Distribution
Manufacturing
General
Total industrial
Flex / R&D
66,482,295
11,658,637
3,332,645
81,473,577
3,577,126
529,877
18,585
21,480
569,942
-5,991
995,523
-34,687
51,480
1,012,316
23,372
1.5%
-0.3%
1.5%
1.2%
0.7%
10.4%
2.6%
1.6%
8.9%
7.2%
14.7%
6.9%
2.5%
13.1%
8.2%
$5.56
$4.98
$4.75
$5.53
$11.55
1,763,928
0
0
1,763,928
0
2,607,533
0
0
2,607,533
0
804,855
0
0
804,855
0
I-88 Corridor
Warehouse / Distribution
Manufacturing
General
Total industrial
Flex / R&D
33,697,593
17,121,893
5,725,952
56,545,438
3,066,493
909,360
36,544
-99,992
845,912
18,387
995,779
-6,778
-113,336
875,665
46,259
3.0%
0.0%
-2.0%
1.5%
1.5%
5.8%
5.1%
3.6%
5.4%
7.9%
9.6%
6.4%
5.7%
8.2%
13.4%
$4.25
$6.10
$15.00
$4.37
$9.74
429,541
0
0
429,541
0
929,012
0
0
929,012
0
1,046,086
0
0
1,046,086
0
North DuPage County
Warehouse / Distribution
Manufacturing
General
Total industrial
Flex / R&D
50,896,431
13,978,378
10,529,476
75,404,285
3,799,828
437,792
-24,249
-3,150
410,393
5,625
904,891
-32,200
208,824
1,081,515
4,035
1.8%
-0.2%
2.0%
1.4%
0.1%
7.2%
5.2%
1.9%
6.1%
8.4%
9.6%
7.5%
5.4%
8.6%
12.5%
$5.13
$4.25
$10.89
$5.08
$9.75
0
0
0
0
0
0
0
0
0
0
290,925
0
0
290,925
0
Fox Valley
Warehouse / Distribution
Manufacturing
General
Total industrial
Flex / R&D
19,066,790
9,283,318
5,453,685
33,803,793
1,634,828
-64,724
-12,461
-13,983
-91,168
-22,471
62,102
24,575
-13,983
72,694
-18,335
0.3%
0.3%
-0.3%
0.2%
-1.1%
6.4%
1.5%
1.4%
4.2%
14.0%
8.8%
4.2%
4.2%
6.8%
19.6%
$4.81
$5.86
$5.98
$5.30
$11.05
0
0
0
0
0
0
0
0
0
0
0
299,520
0
299,520
0
North Kane County
Warehouse / Distribution
Manufacturing
General
Total industrial
Flex / R&D
17,954,450
6,593,625
5,198,749
29,746,824
3,634,949
-26,917
2,000
-17,559
-42,476
28,341
69,032
-29,520
-11,236
28,276
84,909
0.4%
-0.4%
-0.2%
0.1%
2.3%
8.2%
16.3%
4.8%
9.4%
6.2%
11.0%
18.4%
7.4%
12.0%
7.1%
$5.90
$5.60
$6.50
$5.87
$9.89
276,000
0
0
276,000
0
1,033,120
0
0
1,033,120
0
50,346
42,000
0
92,346
0
Chad Buch Research Analyst
8755 W Higgins Rd Suite 750 Chicago, IL 60631 tel +1 773 458 1405 [email protected]
2015 Jones Lang LaSalle IP, Inc. All rights reserved.
29
Chicago | Q2 2015
Inventory
(s.f.)
Quarterly
total net
absorption
(s.f.)
YTD
total net
absorption
(s.f.)
YTD
total net
absorption
(% of stock)
Total
vacancy
(%)
Total
availability
(%)
Average
total asking
rent
($ p.s.f.)
Quarterly
completions
(s.f.)
YTD
completions
(s.f.)
Under
construction
(s.f.)
McHenry County
Warehouse / Distribution
Manufacturing
General
Total industrial
Flex / R&D
12,499,923
12,386,840
4,512,085
29,398,848
2,083,497
41,906
137,025
22,900
201,831
25,000
28,318
5,965
24,722
59,005
29,652
0.2%
0.0%
0.5%
0.2%
1.4%
10.1%
11.4%
7.5%
10.3%
5.6%
15.7%
13.3%
11.7%
14.1%
7.0%
$4.13
$3.30
$4.75
$4.16
$7.59
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Rockford
Warehouse / Distribution
Manufacturing
General
Total industrial
Flex / R&D
11,397,519
6,490,339
4,828,320
22,716,178
1,220,594
-15,925
71,251
72,640
127,966
1,500
116,262
209,707
187,417
513,386
3,900
1.0%
3.2%
3.9%
2.3%
0.3%
14.8%
15.8%
8.6%
13.7%
3.1%
17.3%
19.2%
14.2%
17.2%
3.1%
$3.31
$3.37
$4.15
$3.44
$12.00
186,000
0
0
186,000
0
186,000
0
0
186,000
0
0
0
0
0
0
I-39 Corridor
Warehouse / Distribution
Manufacturing
General
Total industrial
Flex / R&D
14,248,622
4,794,949
3,266,688
22,310,259
N/A
100,000
-41,578
29,653
88,075
N/A
-98,771
-41,578
35,285
-105,064
N/A
-0.7%
-0.9%
1.1%
-0.5%
N/A
10.7%
6.7%
2.6%
8.6%
N/A
14.8%
7.3%
6.2%
11.9%
N/A
$2.95
$4.00
$4.02
$3.11
0
0
0
0
0
0
0
0
0
0
0
0
Northwest Indiana
Warehouse / Distribution
Manufacturing
General
Total industrial
Flex / R&D
18,060,550
16,978,936
7,452,147
42,491,633
2,843,626
200,321
-137,805
-1,090
61,426
5,520
210,775
-135,805
68,390
143,360
4,780
1.2%
-0.8%
0.9%
0.3%
0.2%
6.6%
5.9%
5.8%
6.2%
4.8%
13.4%
5.7%
6.0%
9.0%
13.4%
$4.00
$2.51
$3.95
$3.51
$7.33
0
0
0
0
0
0
350,000
0
350,000
0
163,000
300,000
0
463,000
0
Southeast Wisconsin
Warehouse / Distribution
Manufacturing
General
Total industrial
Flex / R&D
29,005,592
23,534,458
3,591,541
56,131,591
1,607,752
611,796
405,677
71,989
1,089,462
-4,577
774,287
438,521
26,523
1,239,331
-5,607
2.7%
1.9%
0.7%
2.2%
-0.3%
6.5%
3.7%
2.8%
5.1%
8.9%
9.8%
5.3%
4.7%
7.6%
13.0%
$3.66
$3.53
$5.54
$3.64
$8.44
931,415
0
0
931,415
0
1,063,415
377,000
53,680
1,494,095
0
375,908
0
0
375,908
0
Warehouse & Distribution
Manufacturing
General
Totals
Flex / R&D
634,277,212
322,835,041
150,567,728
1,107,679,981
69,071,499
3,965,294
1,786,936
372,389
6,124,619
583,627
6,241,096
441,397
907,339
7,589,832
-218,733
1.0%
0.1%
0.6%
0.7%
-0.3%
8.9%
6.6%
4.5%
7.6%
10.8%
12.7%
9.3%
7.2%
11.0%
14.0%
$4.90
$4.55
$5.69
$4.78
$11.05
5,642,768
302,000
0
5,944,768
0
8,626,960
1,029,000
53,680
9,709,640
0
8,453,162
641,520
0
9,094,682
0
N/A
N/A
N/A
N/A
Chad Buch Research Analyst
8755 W Higgins Rd Suite 750 Chicago, IL 60631 tel +1 773 458 1405 [email protected]
2015 Jones Lang LaSalle IP, Inc. All rights reserved.
30
About JLL
Jones Lang LaSalle (NYSE: JLL) is a professional services and investment management firm offering specialized real estate services to
clients seeking increased value by owning, occupying, and investing in real estate. With annual revenue of $3.9 billion, Jones Lang
LaSalle operates in 70 countries from more than 1,000 locations worldwide. On behalf of its clients, the firm provides management and
real estate outsourcing services to a property portfolio of 2.6 billion square feet and completed $63 billion in sales, acquisition's, and
finance transactions in 2012. Its investment management business, LaSalle Investment Mangemnt, has $47 billion of real estate assets
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