CHICAGO—Exeter Property Group has just bought a 900,000 square foot, four-building industrial portfolio located around the perimeter of Chicago, stretching from the western and southern submarkets to northwest Indiana. The portfolio was sold by a fund managed by J.P. Morgan Asset Management. The sales price was not disclosed.

Erik Foster and Mike Wilson of Avison Young's national industrial capital markets group handled the transaction, and Foster tells GlobeSt.com that the net lease purchase is part of a larger trend.

“We've seen a lot of buyers that need higher returns making purchases in class B submarkets within core markets like Chicago,” he says. Although each of these properties is relatively new and fully-leased to strong credit tenants, they are located in suburban Monee and Batavia, and in Portage, IN, all part of the greater Chicago market but outside the truly core submarkets like I-55.

Therefore, the cap rate for this group is a bit higher, an attractive feature for the Philadelphia-based Exeter, a prolific buyer that has purchased top properties across the US. But the cap rate is not the only reason these properties are attractive. “Rental growth is returning to these markets,” Foster adds, making this a portfolio with “tremendous long-term value for the buyer.”

The properties include:
• A 246,300 square-foot building at 25777 S. Cleveland Ave. in Monee, IL. The tenant is Liberty Furniture, a privately owned furniture manufacturer with a national distribution base. Built in 2001, the building has 30' ceiling heights.
• A 239,700 square-foot facility at 25975 S. Cleveland Ave., also in Monee. DIY Group, a packaging, warehouse and distribution company, leases 100% of the space, built in 2005. The building has 30' ceiling heights.
• A 251,465 square-foot building at 1160 Pierson Dr., in Batavia, IL. The space is leased by DS Containers, a consumer packaging company, and Superior Health Linens, a healthcare supply company. Built in 2006, the building has 30' ceiling heights.
• A 157,120 square-foot building at 5900 Carlson Ave. in Portage, IN. The building was built in 1995, has 29' ceiling heights and is leased to Manufacturing Solutions. The tenant is a leading manufacturing and engineering company.

 

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Brian J. Rogal

Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.