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DENVER-ProLogis, the locally headquartered distribution REIT, is developing new facilities in Pennsylvania and Illinois to suit BMW of North America, which has agreed to lease the properties on a long-term basis. The buildings will total 1.2 million sf and be located in Lower Nazareth, PA, a suburb of Bethlehem, and in Minooka, IL, a suburb of Chicago. Completion is slated for late 2008.

In eastern Pennsylvania, BMW is having ProLogis develop an 870,000-sf facility at ProLogis Park 33, which sits at the intersection of Routes 33 and 248, northeast of Bethlehem. The building, expandable to 1.4 million sf, will replace an existing 252,000-sf facility in Mt. Olive, NJ, which as part of the overall deal ProLogis has acquired from BMW for an as yet undisclosed price.

In the Chicago area, BMW is having ProLogis develop a 306,000 sf facility at ProLogis' Internationale Centre South, near the I-80/I-55 interchange. The building, expandable to 473,000 sf, will not replace an existing BMW facility.

"…we are ready to expand our parts logistics capabilities," says Alan Harris, VP of Aftersales for BMW NA. "Our existing parts centers are operating near capacity now… ."

A BMW source tells GlobeSt.com that its total investment in the two facilities will be approximately $68 million, which includes the cost of the lease and the cost to outfit them with the necessary operating equipment. An additional $105 million will be spent on inventory, spare parts and accessories that will supply 275 BMW and MINI dealers in the Northeast and Midwest. Both new facilities will be built to achieve at least the base certification from the US Green Building Council's Leadership in Energy and Environmental Design program.

Globally, the automotive industry is one of ProLogis' most important customer segments, accounting for more than 17 million sf of distribution space in its overall industrial portfolio, which totals about 447 million sf. "These are strategically important build-to-suit agreements for our company," says Larry Harmsen, ProLogis managing director and head of capital deployment for North America.

BMW NA was represented in the transaction by CB Richard Ellis. The brokerage team included John Porter, Bayne Porter, Lisa Anderson, Bob Hutson, Andrew Corken, Bill Wolf and Patrick Lafferty.

Instant Insights /

BMW Investing $68M in New Distribution Facilities

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