PLEASANT PRAIRIE, WI-Arvato Digital Services has expanded its space here in Southeastern Wisconsin to 678,000 sf. The company renewed a 534,384-sf lease for its building at 11500 80th Ave. in Lakeview Corporate Park. The company, which provides supply chain solutions worldwide, has also signed a new lease for 144,000 sf at 7809 100th St., which it will occupy fully.

Jack H. Rosenberg, principal, and Frederick L. Regnery, VP, both with Colliers Bennett & Kahnweiler’s Industrial Service Group, represented Arvato in both leases. David A. Bercu,, principal, represented Mercantile Real Estate Advisors, owner of 11500 80th Ave. John Sharpe with Lee & Associates represented Texas-based Cobalt Capital, owner of 7809 100th St.

Arvato has occupied the building in the Lakeview park since 2007. The facility, built in 1997, offers four drive-in doors, 32-foot-high ceilings, 40,000 sf of office space and 650 parking spots. “Arvato could have been anywhere in the Chicago area, but they love the labor up there and they didn’t want to move out of the southern Wisconsin area,” Rosenberg says. “People like to live up there, because if companies need to service the Chicago and Milwaukee markets then they need to be in between. There’s very little supply in Lake County, and that’s driving people who would prefer to be in northern Illinois up into Wisconsin.”

Both buildings are just a couple of miles north of the Illinois border. “It’s the healthiest submarket in the entire Chicago metropolitan area,” Rosenberg says. “It has the most positive absorption of any market and it’s a market that is just starting to get industrial interest. A lot of developers and institutional money are looking at the area to make new investments. It has a very low supply and there is user demand.”

Rosenberg would not disclose the lease rate or term. Average lease rates in the area are around $4 per sf, according to a Colliers B&K market report. The occupancy rate in the submarket is around 95%, the research says. Rosenberg says the state of Wisconsin has been helping to keep demand high by offering state incentives to Illinois companies that locate there.

“This area competes with north Lake County now,” Rosenberg says. “We’re seeing active development for Chicago area developers in Wisconsin all the way to Highway 20, which is in Racine County. The two south counties of Wisconsin have become almost adjunct to the Chicago metropolitan area.”

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