Despite a record-setting flow of new inventory hitting Chicago’s industrial market, Bahrain-based Investcorp nabbed a buyer this month for its 17-building Lombard industrial portfolio built decades ago.
Eyeing the region’s strong fundamentals for manufacturing, shipping and warehousing, Brennan Investment Group inked a $76 million purchase of the Yorkbrook Business Park along Eisenhower Lane, public records show. The purchase was backed by a $55 million loan from Canadian Imperial Bank of Commerce, or CIBC. Chicago-based Brennan specializes in managing and building industrial properties.
The 740,000-square-foot portfolio has an average building size of 43,000 square feet with an average suite size of 7,000 square feet. It was 93 percent leased at the time of the sale with 90 tennants total. The portfolio is broken down into 78 percent light industrial use and 21 percent workspace use, and it was completed in the 1970s and 1980s, according to marketing materials.
CBRE’s Michael Caprile, Bentley Smith, Ryan Bain, Joe Horrigan, Zach Graham, Victoria Gomez and Judd Welliver represented the seller.
The sale comes on the heels of a historic push to build new industrial properties in the region prompted by pandemic-related need for distribution centers and other warehouses.
The amount of industrial space hitting the market hit a record high peak in the third quarter of 2023 and has since begun to slow. The 12.8 million square feet of space delivered during that time period was the highest in a single quarter since 1999, according to JLL.
The industrial market has been seen as a safer bet than other commercial real estate sectors in recent years, particularly the beleaguered office sector.
But as new inventory hits the market, demand could look shallower compared to the record-setting marks of yesteryear due to the boom of supply.
That wasn’t a problem for Boston-based TA Realty, which also sold a suburban industrial property this month. Fidelity Exchange Fund purchased an Elmhurst property at 545 Lamont Road for $26 million, according to public records. The business park was developed by Sterling Bay.
Brennan’s Lombard purchase follows a move earlier this month to sell two buildings in an Elk Grove Village business park for $36 million to a data center developer, EdgeConneX, while keeping most of the rest of that 956,000-square-foot portfolio. Investcorp partnered with Brennan on the Elk Grove Village deal as the firms cashed out together with the sale to EdgeConneX.
Brennan is also getting in on the suburban office-to-industrial conversion craze, with a $100 million plan in the works to replace a distressed Rolling Meadows office in the midst of foreclosure with a massive logistics park.
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