CenterPoint Cuts Vacancy With Big, New Tenants

OAK BROOK, IL-Bringing in new tenants taking larger space blocks under longer-term leases is among the reasons given by CenterPoint Properties Trust officials for the company exceeding its expectations. The industrial REIT, which has raised its earnings per share projections to $4.26 to $4.32 for 2003, has also bucked occupancy trends in the market.

While Colliers Bennett and Kahnweiler Inc. research shows industrial vacancy rising to 9% in a 1.3-billion-sf Chicago industrial market that includes southeast Wisconsin, CenterPoint Properties Trust’s occupancy rose 2.5 percentage points to 93%.

Chief investment officer Paul Ahern notes 23 new tenants have signed leases at CenterPoint Properties Trust buildings for 2.3 million sf so far this year. The square footage eclipses last year’s total, he says, which took 38 new tenants to accomplish.

Ahern reports the REIT’s leasing strategy includes signing deals with lower initial rates, moving up to market rates by the third year. CenterPoint Properties Trust also has not been afraid to sign short-term deals with what it considers to be long-term prospects.

That has paid off with catalog company Collections, Inc. signed a 10-year deal that included 500,000 sf at 5000 Proviso Dr. as well as another 100,000 sf at O’Hare West. The company was a subtenant in space in a building in Des Plaines that was acquired by CenterPoint Properties Trust, Ahern notes. Another example can be found in southwest suburban Alsip, where Advertising Resources has grown from an 88,000-sf tenant to one leasing 266,000 sf, Ahern adds.