(Read more on the industrial market.)

GARY, IN-Welsh Investments has purchased the 1.1 million sf Great Lakes Industrial Center for $19.1 million. The building, at 201 Mississippi Ave., was bought from CenterPoint Properties.

Welsh paid an unheard-of 15% cap rate for the property, says Kevin M. Lynch with Sperry Van Ness, which represented Welsh. “It’s a 20% cash-on-cash deal, in five years the whole investment is paid off.” The property is 73% occupied, and most of the tenants are steel mill related, Lynch tells GlobeSt.com. The tenants include Metal Processing, Wheeling-Pittsburg Steel, Ambrico Inc., Caster Maintenance and others. The facility features heavy power, cranes with more than 30 ton capacity, rail access, an outside truck scale and a large land site for tractor trailer storage.

“Any time you have a certain type of tenant, you take some risk,” Lynch says. “The steel mill business is cyclical in nature, and it seems to have settled down in the past few years. What’s interesting is when you hear a steel mill is shutting a furnace or something, that’s not exactly the worst thing, for some of these tenants would get the contract to renovate those furnaces.”

He says the buildings also aren’t exactly pretty. “They’re metal-sided, but they’re very functionally for that type of industry. They’ll generate a lot of cash,” he says. The average rental rate at the complex is $3.25 per sf, net, he says.

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