Bank of America to sell two foreclosed industrial properties
By Eddie Baeb
Crain's Chicago Business
September 15, 2009
Bank of America Corp. is about to sell a new, 420,000-square-foot warehouse in the southwest suburbs, one of the first big sales of bank-owned industrial real estate since the onset of the recession and the credit crunch.
The building, at 21561 Division St., in Crest Hill, and a smaller one nearby have stood empty since they were built in 2006.
The banking giant is under contract to sell the larger property to an unidentified firm that would use the building for its business, sources say.
A deal would mark one of the Chicago-area’s largest sales of foreclosed industrial properties.
“We are on the wave of a lot of bank-owned properties being sold,” says Kenneth Szady, an investment sales broker and executive director with Cushman & Wakefield Inc., who isn’t involved with the properties.
“This is the trickle. This is the empirical data that banks are releasing properties,” he added.
The buildings, located off Interstate 55 and U.S. 30, were built and owned by a joint venture of Dallas-based Trammell Crow Co. and GE Asset Management in Stamford, Conn. The original lender was Chicago-based LaSalle Bank, according to property records, and Charlotte, N.C.-based B of A took title on July 10.
CB Richard Ellis Inc.’s Ted Staszak and Traci Buckingham are marketing the properties for sale or lease, and declined to comment.
In addition to the building at 21561 Division St., a smaller 262,500-square-foot building at 21511 Division St., is also being marketed. Asking net rental rate is $1.95 per square foot, according to a brochure that touts the properties as “Bank-owned and slated for immediate sale!”
Pricing for the pending sale couldn’t be determined. But sources say the building, which doesn’t have built-out interiors, will probably fetch less than $20 per square foot, or $8.4 million.
Cushman’s Mr. Szady says the price is sure to be less than replacement cost, or the current expense to build a similar structure. But investors are unlikely to go for the properties, which have struggled to find tenants because of their location more than a mile off I-55 in a little known suburb where there’s also some housing nearby.
“No investors would buy these buildings,” says J.D. Salazar, managing principal of Downers Grove-based industrial brokerage Champion Realty Advisors LLC, who says he’s showed the buildings to prospective tenants. “I know they’ve been pushing pretty hard to sell or lease these buildings.”
Representatives with Trammell Crow and GE declined to comment. A B of A spokeswoman was traveling Tuesday and couldn’t be reached.
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