CHICAGO—The value of industrial real estate in Chicago has been proven again, especially when it comes to new buildings dedicated to product distribution. JLL Income Property Trust has just acquired Aurora Distribution Center, a 305,000 square foot warehouse in suburban Aurora, for $27.7 million.

Fortune 200 manufacturer PPG Industries recently moved in and now occupies 100% of the property, which was just finished by Rosemont, IL-based Conor Commercial Real Estate. What made the building, located in the Orchard Gateway Corporate Center along Orchard Rd. near I-88, especially attractive to investors was that PPG will lease it for at least another 12 years, triple-net, with 2% annual rent increases.

“For us income is key,” Brian Kuzniar, portfolio manager for the trust, tells GlobeSt.com, “and this property falls very much within our industrial portfolio strategy. We're looking for properties that are 100% leased and will stand the test of time.”

Based on purchase price, he estimates it has a capitalization rate of 5.4%, which puts it right in the trust's wheelhouse. It already has other, similar properties in the Chicago suburbs, and concentrates much of its purchasing efforts in vibrant cities such as Seattle, Atlanta, Charlotte and Tampa. But when it comes to the top coastal markets such as Los Angeles and New York, Kuzniar says “we continue to explore opportunities there, but you can fall below a four cap in some of those markets today.”

“This is our second industrial acquisition in this market in the past six months, and the eighteenth property investment we've made in the industrial sector over the last three years representing an industrial sector investment of over $370 million,” adds Allan Swaringen, president and chief executive officer of the trust.

Instant Insights /

Chicago Distribution Centers Attracting National Investors

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