Brookfield Buys Suburban Chicago Industrial from DWS for $98M

Brookfield Properties is betting on Chicago’s industrial market.

The firm bought two Bolingbrook properties and one in Romeoville for a combined $98 million this month, Will County property records show. All three were previously owned by German asset management firm DWS.

The sites, which are described as having general industrial use or warehouse use, are located at 340 Crossroads Parkway and 555 Remington Boulevard in Bolingbrook and 1125 Remington Boulevard in neighboring Romeoville. Tenants include LaGrou Distribution System and fulfillment center Staci Americas.

Brookefield’s plans for the properties are not clear yet. Representatives from Brookfield and DWS did not respond to requests for comment.

The industrial asset class has outperformed other commercial real estate sectors hammered by the pandemic in the past few years. Demand for shipping and distribution centers grew while demand for office space plummeted.

By contrast, suburban Chicago office buildings have been losing tenants and plummeting in value. Vacancy rates remain close to 30 percent, and buildings have sold for as little as $7 per square foot.

Although industrial investment is at an all-time high, reports from late 2023 indicate that the market could be getting over-saturated with new construction.

The amount of industrial space entering the market in the third quarter of 2023 — 12.8 million square feet — was the highest since 1999, according to JLL.

Buyers could see prices adjust this year as more industrial developments enter the market, but Chicago’s reputation as a central transportation hub keeps demand high.

Need for data centers to support the growth of artificial intelligence could also keep the industrial market active. Chicago is one of the most “in-demand” markets in the U.S. for data centers, according to JLL.

In July, Compass Datacenters bought Sears’ Chicago-area headquarters for $194 million, with plans to demolish the 2.4 million square-foot network of interconnected buildings on the 194-acre site. It was the second-priciest commercial real estate transaction in Chicago in 2023.