A flurry of deals totaling nearly $50 million and 1.3 million sf includes the sale of a 727,000-sf at 400 Busse Rd. in this northwest suburb that had a 500,000-sf vacancy hole during the brief marketing period. Nonetheless, LendLease Real Estate Investments topped about a dozen competitors, mostly other owner-operators, with an offer of approximately $20 million for the 29-year-old asset considered one of the largest in the area.

"All of the investment committees are saying, 'We will take the market risk in O'Hare.' They know it will rally," Szady tells GlobeSt.com, suggesting owners may want to consider selling into the market. "We're at the peak in terms of historical pricing."

The second-largest industrial submarket in a market that includes southeast Wisconsin entered the fourth quarter 2002 with the largest amount of vacant space at nearly 12.9 million sf, although its vacancy rate was a better-than-average 9.87%, according to HSA Commercial Real Estate's market report. Meanwhile, the submarket's $5.36 per sf rental rate is surpassed only by Lake County.

While buyers look past vacancy and nondescript appearances of buildings as they bid up prices around the world's busiest airport, the capital markets are even more bullish, Szady suggests. "Chicago is No. 1 on their radar screen," Szady tells GlobeSt.com, adding the O'Hare market in a top tier that includes New Jersey, Southern California's Inland Empire and I-95 Corridor in the Miami market.

On the northern side of the airport, West Dundee, IL-based ML Realty Partners LLC paid $15.7 million for the 380,000-sf, two-building Messenger Industrial Complex at 1905 S. Mt. Prospect Rd. in Des Plaines. Although considered a class-A warehouse that was 100% occupied at the time of the sale, most of the space comes up for renewal in October. Still, Szady says ML Realty Partners had to fend off more than a dozen offers to get to the closing table.

So did Chicago-based First Industrial Realty Trust, which paid slightly more than $9.5 million for a combined 159,000 sf at 820-90 Supreme Dr. and 800-20 Thorndale Ave. in Bensenville. Paying $60 per sf may seem like a rich price, but Szady notes the 25,000 sf of vacancy was quickly leased after closing to a Korean air freight company.

"It's tough to replicate that location," Szady notes. "Like the Elk Grove Village property, it represents highly desirable product, but not the best-looking product."

Szady also closed the sale of the 127,800-sf 100 E. Howard Ave., also in Des Plaines.

Instant Insights /

GlobeSt.com EXCLUSIVE: Crow SVP Pilots $50M in O'Hare Deals

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