EQT Exeter Pays Over $225M for Warehouse Portfolio

EQT Exeter dropped $225 million on a seven-building industrial portfolio concentrated in a southwest Chicago suburb.

The firm, which is part of Swedish private equity firm EQT Group, picked up 3.8 million square feet in assets, comprised of four buildings in Joliet, and others outside Illinois, including in Mississippi and Kentucky, CoStar reported.

The seller was Atlanta-based IDI Logistics, a subsidiary of Canadian-based companies Ivanhoe Cambridge and Oxford Properties.

The acquisition includes more than 1.2 million square feet in Joliet’s Rock Run Business Park, a roughly 15-acre industrial site near the intersection of interstates 55 and 80. EQT bought the Rock Run space for nearly $99 million.

“Given constraints on competing supply and its functional and flexible design that can accommodate a diverse range of blue-chip tenants, we intend to lease the only short-term vacancy in the portfolio — in the Rock Run Business Park in Joliet, Illinois — to one of the many corporations serving the Midwest and Midsouth,” EQT’s Matt Brodnik told the outlet.

Several developers, including Dermody Properties and Brennan Investment Group, have eyed struggling and aging suburban Chicago office campuses as potential acquisition targets in order to tear down the current buildings and turn the properties into logistics parks to help satisfy the growing demand for warehousing, while eliminating supply in office markets that are losing appeal due to remote work trends.

The investment follows EQT’s recent success in raising a $4.9 billion fund earmarked for the acquisition of logistics properties, one of the largest U.S. funds to close this year.

With the pandemic sparking an increase of e-commerce, demand for industrial space has soared nationwide, especially in the initial years of the public health crisis. So far in 2023, there have been $40.2 billion worth of warehouse transactions, on pace to fall well short of last year’s $119.1 billion in sales volume, the outlet reported.

Elsewhere in Chicagoland, notable warehouse deals this year include Prologis’ $23 million purchase in Bolingbrook, and Bank of America’s investment arm dropping $56 million on a 650,000-square-foot logistics building off Interstate 88 in North Aurora.

— Quinn Donoghue