Justin Fierz and Michael Androwich’s Midwest Industrial Funds sold its new speculative warehouse development to an East Coast firm for more than $41 million.
Boston-based Stag Industrial bought the 400,000-square-foot facility, which sits on 23 acres at 537 Discovery Drive in suburban West Chicago, in a deal recorded Aug. 11, according to DuPage County public records. Stag, helmed by CEO William Crooker, didn’t immediately respond to a request for comment.
Oak Brook-based Midwest Industrial, a development and acquisition firm led by founders Fierz and Androwich, announced that construction was underway on the development in March of last year. Development costs weren’t disclosed, and the firm didn’t immediately respond to a request for comment.
In a December interview with The Real Deal, Fierz said leasing at Midwest Industrial’s properties had been “as strong as ever,” adding that limited supply was “getting gobbled up pretty quickly.”
But now, developers like Midwest Industrial adding more and more space has softened the market across the country, with a 47 percent drop in leasing year-over-year last quarter, according to a report from JLL.
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The Oak Brook firm “recognized the market need and lack of supply for this type of Class A speculative building in the submarket,” a company webpage said of the West Chicago asset.
The Chicago metro area’s industrial vacancy rate hit a record low of 4.5 percent at the end of 2022, which increased to 4.6 percent last quarter, according to a report from Colliers International. Builders are on track to complete almost 42 million square feet of Chicagoland warehouse space by the end of 2023, which would be the largest annual total ever, Colliers said. Most of that space has yet to be leased.
The West Chicago property had at least one major tenant, California-based Vanguard Logistics Services, as of last year. The firm inked a 287,000-square-foot lease at the Discovery Drive facility.