Honeywell's distribution center in suburban Columbus

CHICAGO, IL- Jones Lang LaSalle’s Capital Markets announced this week that the firm had finalized the sale of five large industrial buildings in the suburbs of Chicago, Indianapolis, Cincinnati and Columbus with a total of more than 2.7 million SF. The Welsh Property Trust purchased the group from KTR Capital Partners for $99.5 million.

The purchase continues the Minnesota-based Welsh’s strategy of picking up almost-new distribution buildings with low vacancy rates and central locations. Welsh acquired similar facilities in 2011 when they spent $65 million for seven buildings in the Atlanta suburbs.   

“Right now we get a deep bench of buyers” for similar offerings, Jones International Director John Huguenard told GlobeSt.com, but this “really fits their existing footprint well. Everyone wants Chicago and Indy.” Along with Executive Vice President Peter Harwood, he led the Jones team on the transaction.

“This portfolio is located in four of the top industrial distribution markets in the Midwest,” said Harwood. Each building has access to some of the nation’s top rail and distribution hubs, connectivity to major Midwestern transportation routes and direct access to high concentrations of the U.S. population.”

All of the buildings were built in 2006 or 2007 for single tenants and are almost fully leased. What makes the acquisition especially attractive is that most tenants, who include Krunchers Kettle Cooked Potato Chips and Honeywell International, signed leases several years ago for below-market rents, giving the portfolio a higher revenue potential.  

“Back then, the market was a lot more challenging in general,” said Huguenard.