Middle Market Digest-The Midwest

BY THE NUMBERS

ELGIN, IL—The market for $1-million-plus homes in the seven-county metropolitan Chicago area showed solid improvement in 2017. According to the year-end edition of the RE/MAX Luxury Report on Metro Chicago Real Estate, sales rose 9.7% to 2,658 homes, while inventory levels moderated, falling 15.3%. The median sales price for the full year slipped 1.9% to $1.3 million, and the average time that a luxury home sold in 2017 spent on the market was 169 days, four days longer than in 2016. “Much of the decline in the median price can be attributed to a shift in market activity in Chicago,” says Jeff LaGrange, vice president of RE/MAX Northern Illinois. The number of luxury home sales in the $1 million-to-$2 million range increased by 21%, but homes that sold for at least $3 million decreased by 6.3% in 2017.

CHICAGO—Suburban tenants leased 4.6 million square feet during 2017, a decrease of 17.2% from 2016, and well below the long-term annual average of 5.5 million square feet, according to a new report from Savills Studley. The East-West Corridor, with about two million square feet leased, was the only submarket to keep pace with long-term trends. Suburban Chicago's availability rate inched down by 10 bps both overall and in class A buildings, dropping to 24.1% and 25.4%, respectively. Overall availability has jumped by 60 bps since year-end 2016. The class A rate has decreased by 50 bps year-on-year.

NEWS & NOTABLES

CHICAGO—Matt Kurucz has just joined Crow Holdings Industrial, an affiliate of Dallas‐based Crow Holdings, as managing director and will lead a new office based in Chicago. Kurucz joins CHI from The Opus Group, where he served as director of real estate development, and was responsible for the leasing and development of more than 3.7 million square feet of industrial product in the Chicago market. “We have long-aspired to return to the Chicago market because of its prominence as a strategic, national distribution hub,” says Ken Valach, CHI's chief executive officer. “Matt shares this passion for the region and brings to our organization strong market acumen, deep experience, and a broad industry network.”

CHICAGO—NXT Capital has expanded its relationship with Aflac Inc. to include management of a portfolio of commercial real estate mortgage loans. Aflac Global Investments, the asset management subsidiary of Aflac Inc., has committed to fund a portfolio of up to $2.0 billion of floating-rate, first mortgage loans for institutional quality, middle market commercial properties throughout the US on behalf of Aflac's general account, purchasing approximately $1.1 billion of these loans from NXT. Aflac also increased its minority equity investment in NXT by approximately $75 million to strengthen a partnership that began nearly a year ago with an agreement to manage a portfolio of middle market corporate loans.

CHICAGO—CBRE Group, Inc., has brought on nine new professionals and three support team members to its expanding retail advisory and transactions group in Chicago. Joining CBRE are: Danny Jacobson (pictured), senior vice president; Luke Molloy, senior vice president; Meredith Oliver, senior vice president; Brendan Reedy, senior vice president; Amy Sider, first vice president; Jack Siragusa, first vice president; Brent Wayburn, first vice president; Stephen Ansani, vice president; Nicki Berg, vice president; Christina Edson, senior graphic designer; Lauren LaRoche, graphic designer; Scott McLinden, analyst. “This was an excellent opportunity for CBRE to demonstrate its commitment to expanding our talent base and retail platform in the Chicago area,” says Bill Wright, managing director CBRE's retail advisory and transaction services group for the Midwest. “The addition of these professionals will undoubtedly strengthen our position in the Chicago retail market, which will allow us accomplish our ultimate goal of providing better services and outcomes for our clients.”

ITASCA, IL—Dustin Wampach has joined Itasca, IL-based ML Realty Partners as asset manager. He will focus on portfolio operations and negotiating leases for the company. “Dustin brings to the firm a wealth of knowledge and experience in industrial portfolio management, combined with enthusiasm about real estate,” says Rachel Peck, director. “We're happy to have Dustin on board.” Wampach spent several years working with CBRE, most recently as real estate manager. He holds a Bachelor of Arts degree in Political Science from Eastern Illinois University.

DEALTRACKER

JOLIET, IL—CBRE Strategic Partners US Value 8 has acquired a six-building portfolio of class A warehouse and manufacturing buildings totaling over 1.4 million square feet in master-planned business parks within the Chicago region's two largest industrial submarkets. The portfolio is 95% leased to six tenants. The portfolio includes five buildings located along Chicago's major east-west thoroughfare and one building located adjacent to the major north-south tollway: 2700 Ellis Rd., Joliet, IL; 2101 W. Haven Rd., New Lenox, IL; 2201 W. Haven Rd., New Lenox, IL; 2200 W. Haven Rd., New Lenox, IL; 2520 Diehl Rd., Aurora, IL; 494 E. Lies Rd., Carol Stream, IL. The buildings range in size from 90,000 to 690,000 square feet and have attributes that are attractive to a wide range of users, such as 24' to 32' clear heights, ESFR sprinklers, 6-inch to18-inch reinforced concrete slab floors, above-standard trailer and car parking, and excess land for possible expansion. Four of the six buildings in the portfolio were constructed as build-to-suits for the existing tenants.

ELBURN, IL—Marcus & Millichap just completed the sale of a 77-acre parcel located in unincorporated Kane County at 41W750 Keslinger Rd. in Elburn, IL, according to Steven D. Weinstock, regional manager of the firm's Chicago Oak Brook office. The asset sold for $820,000. Rick Gordon, an investment specialist in land, redevelopment and adaptive re-use properties with Marcus & Millichap's Chicago Oak Brook office, had the exclusive listing to market the property on behalf of the seller, a financial institution.  The buyer, a private investor, was secured and represented by Gordon. This parcel is said to be well suited for an investment as well as a potential large lot single-family home development or a potential business development.

BUILDING BLOCKS

CHICAGO—Skender Construction recently completed interior construction of the 176,000-square-foot headquarters for retail real estate company GGP, formerly known as General Growth Properties, in River North Point at 350 N. Orleans, where GGP recently relocated 700 employees. Its new, three-floor space contains modern finishes, an abundance of natural light, and an open office format with exposed ceilings. The design includes strategically placed conference rooms, phone rooms, hubs and gathering areas to foster a collaborative environment. The focal point of the space is the third-floor café that walks out to a 10,500-square-foot private roof deck overlooking Wolf Point and three branches of the Chicago River. Serving as general contractor, Skender worked in collaboration with Chicago-based design firm ARCHIDEAS, Environmental Systems Design and JLL to successfully complete the project.