nai chicago o'hare industrial report 2008

8/14/2019 NAI Chicago O'Hare Industrial Report 2008

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Too Much Space......Not enough demandIn our past OHare newsletters, we noted that land values or

industrial sites had reached an all time high. In Cook County,prices ranged rom $21.00 to $23.50 PSF and in DuPage

County rom $23.00 to $26.00 PSF. The range in pricesdepended on the shape o the site and over all suitability ordevelopment (i.e. soil conditions, topography). In DuPage

County, lower real estate taxes contributed to higher prices.

Even during the dramatic increase in land values and theredevelopment o inll OHare sites, developers and investors

questioned, How deep is the air reight market? Unortunately,their concerns have became reality as the redevelopment

bubble burst.

The downturn is the direct result o the combination o

minimal absorption o existing space coupled with thenumerous planned and under construction developments.

There are 12 proposed acilities that total 2,145,083 SF, 6acilities under construction totaling 797,499 SF, and 19 newer

acilities totaling 2,468,885 SF that are ready or immediateoccupancy. These projects represent as much as 5,400,000

SF o available industrial space sitting vacant as a result othe turndown in demand.

At this time, the eect o the downturn has not yet beenquantied rom a property value view point as there have not

been any recent sales in this cool market.

OHare Area Industrial Market ReportWarehouse & Distribution Spring/Summer 2008

The impact o the downturn is refected in lease transactionsor speculative warehouse buildings in the last twoyears. The majority o these deals involved smaller users

under 70,000 SF. The majority o the larger transactionslanded as build-to-suit opportunities, such as the Coaste

Company o America (253,410 SF) and Forward Air TruckTerminal (125,000 SF) transactions. Since these deals were

signed, there has been marginal speculative developmenactivity. Deals in the past 6 months include Levantina USA(44,660 SF) and NVC Logistics (40,000 SF) in Bensenville

and Corporate Express (44,185 SF) in Franklin Park. Therelatively smaller size o these transactions and negative

absorption hardly have developers excited to continue ghtingto pay upwards o $20.00 PSF or land redevelopments.

A possible strategy or building owners looking to sell in thenext two to three years who want to preserve maximum value

Development Name City Developer SF

IAC O'Hare Business Center Des Plaines IAC 300,000

Seymour Avenue Redevelopment Franklin Park Centerpoint 265,122

Busse/Landmeier Distribution Elk Grove Village ProLogis 260,768

Busse/Devon Distribution Elk Grove Village ProLogis 231,176

Bensenville Business Center Bensenville Ridge 214,000

Ellis O'Hare Logistic Center Bensenville Washington Prop. 205,540

Ellis Street Redevelopment Bensenville AMB 173,000

Waveland Avenue Redevelopment Franklin Park Centerpoint 142,477

Arthur Avenue Redevelopment Elk Grove Village First Industrial 142,000

Dierking Terrace Redevelopment Elk Grove Village Gullo 100,000

Addison Avenue Redevelopment Franklin Park Ridge 84,000

Truck Terminal Redevelopment Des Plaines Panattoni 27,000

Total 2,145,083

Proposed OHare Developments

Development Name City Developer SF

Des Plaines Cargo Center Des Plaines Panattoni 90,780

Chase Avenue Redevelopment Elk Grove Village First Industrial 129,432

Lake Center Corporate Park Mount Prospect Alter 108,732

Lake Center Corporate Park Mount Prospect Alter 147,932

25th Street Redevelopment Melrose Park Korman & Lederer 131,786

Rose Street Redevelopment Schiller Park ML Realty 128,837

Total 737,499

Under Construction O'Hare DevelopmentsJanuary 1, 2008

(Continued on page 4


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Featured Warehouse& Distribution Availabilities

Map Location Total SF Available Total Building Size City Clear height Loading Docks Rental Rate

A 112,735 325,045 Franklin Park 30 12 $5.50 net

Class 6B tax incentive in place, located only minutes rom OHare

B 115,561 115,561 Wood Dale 22 16 $7.65 net26 trailer parking positions available, 15,000 SF o oce is on second foor

C 306,918 306,918 Bensenville 26 48 $4.75 netBuilding easily divides in hal, 12 foors in 150,000 SF

D 111,272 111,272 Elk Grove Vlg. 216 12 $5.15 grossSublease available through August 31, 2009, 15,750 SF air conditioned warehouse space

E 115,785 115,785 Itasca 22 10 $4.80 netElgin OHare Expressway rontage, recently renovated


F 80,000 80,000 Des Plaines 20 8 $6.50 grossAdditional 3 acres o land available or outdoor storage, building expansion or trailer/car parking

G 67,932 67,932 Wood Dale 24 22 $7.50 netTrailer parking or additional car parking available, recently renovated

H 57,285 90,000 Elk Grove Vlg. 18 6 $4.65 netLunch room and locker rooms make it ideal or users with large number o warehouse employees

I 80,360 80,360 Bensenvi lle 28 29 $7.99 netBrand new distribution building ideally located only minutes rom OHare south cargo entrance

J 58,513 58,513 Itasca 22 6 $5.75 netFrontage on Irving Park Road making it ideal or users that have a showroom

100,000 Square Feet & Larger

50,000 100,000 Square Feet


K 21,333 21,333 Bensenvi lle 20 2 For SaleAdditional 0.75 acres o land available or outdoor storage, building expansion or trailer/car parking

L 35,908 35,908 Elk Grove Vlg. 20 2 $5.25 netEntire property recently renovated; warehouse walls painted, foor sealed and oces remodeled

M 48,516 48,516 Itasca 18 4 $5.00 netEasy access to expressways, interior o warehouse recently renovated

N 30,000 30,000 Elk Grove Vlg. 16 2 $6.75 grossWarehouse is partially air conditioned, versatile oce space that can be renovated to t any use

O 22,050 22,050 Des Plaines 18 2 $5.35 netFree standing building in the heart o Des Plaines industrial park


P 15,000 15,000 Bensenvi lle 20 1 For SaleTenant in place until Spring o 2009, excellent opportunity or user/investor

Q 11,166 & 10,237 69,000 Des Plaines 17 3 $7.50 grossExcellent visibility on Touhy Avenue, direct access to I-90 and I 294

R 16,176 43,958 Wood Dale 14 4 $5.00 netExcellent location with both visibility on our way interchange as well as easy access to highways

S 16,932 16,932 Elk Grove Vlg. 14 1 $7.75 grossBuilding and/or parking is expandable, 1,800 SF o heated storage shed not included in total square ootage

T 17,600 17,600 Itasca 18 6 $4.95 netFreestanding building on large land site that can be used or trailer parking

20,000 50,000 Square Feet

5,000 20,000 Square Feet

All inormation is subject to verication and no liability or e rrors or omissions is assumed.

Prices are subject to change and listings may be withdrawn without notice.


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OHare Area Industrial Market ReportFirst Quarter 2008

*Italics denotes NAI Hiffman transactionsMajor OHare Lease Transactions

Major OHare Sales Transactions

Address Size (SF) Price (mil) Price (PSF) Buyer Seller

3708 River Road, Franklin Park 325,000 $20.8 $64 TA Associates CenterPoint Properties

2301 Lunt Ave., Elk Grove Village 260,000 $15.3 $59 AMB Property AW Mendenhall

1800 Bruning, Itasca 202,000 $19.0 $94 Inland Real Estate Group Bradley Associates

854 W Irving Park Rd., Itasca 133,410 $6.25 $48 Mr. Davids Carpet Serv. TST Impreso

1301 Estes Ave., Elk Grove Village 123,618 $4.5 $37 Ridge Property Trust HC Brill Co., Inc.751 Rohlwing Rd., Itasca 109,450 $5.3 $44 Crawford Supply Trust

1949-51 Arthur Ave., Elk Grove Village 105,000 $4.5 $43 Libra Industries CenterPoint

Tenant Address Size (SF) Comments

Coaster Company 255 Wille Road, Des Plaines 253,000 BTS Lease

Dealer Tire 3708 River Road, Franklin Park 132,000 LeaseSavino del Bene 1905 Mt. Prospect Road, Des Plaines 125,000 Lease

Houston Harvest 1010-1050 Sesame St., Bensenville 120,708 Renewal

Shelter Distribution 1530 Birchwood, Des Plaines 47,000 Lease

Levantina 850 Devon, Bensenville 44,660 Lease

Corporate Express 11101 Franklin Ave, Franklin Park 44,185 Lease

NVC Logistics 371 Meyer, Bensenville 40,000 Lease

Grainger 850 Devon, Bensenville 26,500 Lease

10.37 11.13

8.749.86 10.01

OHare Overall Vacancyin percent

3Q072Q071Q074Q06

Direct

4Q07

Statistics

Market Size (SF) 114,233,530Overall Vacant Space (SF) 12,709,192

Overall Vacancy 11.13%

4Q07 Absorption (SF) -859,933

YTD Absorption (SF) -1,497,100

Net Rental Rate $3.00 - $8.50

YTD Under Construction 674,007

OHare Absorptionin hundred thousand SF

4.37

4Q073Q072Q071Q074Q06

-1.64

-8.59

0.90

-9.12

Development Name City Developer SF Available Total SF

O'Hare Logistics Center Bensenville Seefried/Rreef 36,641 107,800

O'Hare Logistics Center Bensenville Seefried/Rreef 80,360 80,360

Elk Grove Building #1 Elk Grove Village ML Realty 251,076 251,076

Elk Grove Building #2 Elk Grove Village MIRVAC 251,076 251,076

Pratt Avenue Center Elk Grove Village Private 48,500 103,175

Belmont Business Center #2 Franklin Park Private 120,000 179,161

Franklin Avenue Center Franklin Park Ridge 45,336 90,151

O'Hare Distribution Center Franklin Park Duke 88,060 88,060

Franklin Park Distribution Center Franklin Park Washington 73,160 73,160

O'Hare Business Center East Franklin Park TA 112,735 325,045

O'Hare East Business Center Franklin Park KTR 195,071 195,071

O'Hare East Business Center Franklin Park KTR 199,223 199,223

Seymour Avenue Center Franklin Park Centerpoint 42,000 227,280

Briarwood Business Center Mount Prospect ING 237,350 237,350

Briarwood Business Center Mount Prospect ING 111,498 228,097

Whitehall Drive Center Northlake Centerpoint 251,584 251,584

IAC O'Hare Distribution Center Elmhurst IAC 250,000 250,000

IAC O'Hare Business Center Des Plaines IAC 48,215 48,215

Meyer Road Business Center Bensenville Seefried/Rreef 27,000 67,000

Total(s) 2,468,885 3,252,884

Existing O'Hare DevelopmentsJanuary 1, 2008or their property in a downturn market could be a

short-term sale/leaseback. This sale structure willhelp mitigate the risk or developers who are notprepared to redevelop sites now and would rather

wait to see how the market reacts to the oversupplyo product. In the interim, the sale/leaseback

structure will help with carrying the building untilthe market absorbs the 5,400,000 SF o current and

soon to be available warehouse inventory.

The next 12 to 24 months should prove to be critical

with respect to the absorption o warehouse spaceand how it aects the uture value o industrial land

within the OHare market. As stated, the eect othis overbuilt market has yet to be quantied rom a

property value stand-point as there have not beenany recent sales o redevelopment sites since the

market cooled. Most likely, land prices should dropback into the high teens considering the lack ointerest rom developers.

(Continued from page 1)


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Brian W. ColsonExecutive Vice President & Partner

Industrial Services Group

Scope o Services Experience:

Brian W. Colson is an Executive Vice President and Partner with NAIHiman. Brian specializes in industrial real estate including representing

property owners, tenants and buyers in the greater Chicagoland areahelping to create real estate solutions. Brians primary areas o ocusinclude properties within the OHare and West suburban industrialmarkets.

Among the companies Brian has represented in sale and leasetransactions are Allied Building Products, Alcoa, CenterPoint Properties,

AMB Property Corporation, Panattoni Development Corporation, TheFogelson Companies, DAL Tile, Forward Air, Heritage Industries, Headsand Threads International, K&M Plastics, Overhead Door Company,Inc., Roadway Trucking, Savino Del Bene, and XL Screw Corporation.

Brian is actively involved with the Association o Industrial Real EstateBrokers (AIRE), and in 2004, AIRE honored Brian with the covetedFrank Mahoney Award or Excellence. This award recognizes the topproducing member who has been a broker or 5 years or less. Overthe past three years, Brian completed industrial transactions, valued inexcess o $150,000,000. He is also actively pursuing both the SIORand CCIM designations.

Prior to joining the frm, Brian gained exposure to the feld o real estateworking as a Senior Commercial Real Estate Appraiser or First RealEstate Services, Inc. and LaSalle Appraisal Group. He has six years owork experience in the valuation o real estate or a variety o purposesincluding bankruptcy, estate, ad valorem and internal planning. He isalso experienced in appraising industrial acilities, apartment complexes,nursing homes, shopping centers, ofce buildings, commercial buildingsand vacant land.

Education:

St. Marys College, Bachelor o Arts

Proessional Afliations and Designations:

Real Estate Salesperson, IllinoisRecipient o Association o Industrial Real Estate Brokers (AIRE)2004 Frank Mahoney Award o Excellence

Association o Industrial Real Estate Brokers (AIRE), MemberCommercial Certied Investment Member, Candidate

Young Industrial Brokers, Member

OHare Area

Industrial Market ReportAbout the Authors

Eric W. FischerSenior Associate

Industrial Services Group

Scope o Services Experience:

Eric W. Fischer has been with the Industrial Services Group at NAHiman since 2003. Eric is responsible or identiying build-tosuit opportunities, generating tenant and property representationrelationships and leasing existing industrial properties throughoutthe Chicago metropolitan area. His primary area o ocus includesproperties in the OHare and Northern Cook County markets.

Eric has represented companies such as Dulin Metals, Libra IndustriesShelter Distribution, Marantec America, Dal Tile, Caliornia ClosetsPublic Storage, Prinz International, Hyper Microsystems, CenterPointProperties, Panattoni Development Corporation, The Missner GroupSitex Realty Group and TA Realty Associates.

Eric is a licensed real estate salesperson and is an active member othe Association o Industrial Real Estate Brokers (AIRE), and was theManaging Director o the Young Industrial Broker (YIB) organizationrom 2004 through 2007.

Prior to joining the frm, Eric received his Masters o BusinessAdministration (MBA) with a concentration on Real Estate Investmenand Finance rom DePaul University. He has also gained sales andproject management experience rom working or RosboroughPartners, Inc., a landscape contracting frm.

Education:

DePaulUniversity, MBAReal Estate Investments & FinanceUniversity o Illinois, BS

Proessional Afliations & Designations:

Real Estate Salesperson, IllinoisYoung Industrial Brokers (YIB) - MemberAssociation o Industrial Real Estate Brokers (AIRE) MemberCertied Commercial Investment Member (CCIM) CandidateDePaul University Real Estate Alumni Association MemberInternational Air Cargo Association o Chicago (IACAC) - Member

tel 630 691 0619

ax 630 932 7258

[email protected]

tel 630 693 0677

ax 630 932 7258

[email protected]


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One Oakbrook Terrace

22nd & Butterfeld Road

Suite 600

Oakbrook Terrace IL 60181

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OHare AreaIndustrial Market ReportSpring/Summer 2008

Stay up-to-date with the happenings o the OHare Industrial Real Estate Market.

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available industrial warehouse / distribution and cargo acilities surrounding the OHare area, please complete the attached orm

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tel 630 691 0619 tel 630 693 0677 One Oakbrook Terrace, Suite 600ax 630 932 7258 ax 630 932 7258 Oakbrook Terrace, IL [email protected] [email protected] www.himan.com

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nai chicago o'hare industrial report 2008

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