Suburban industrial portfolio sells for $21.2 million - By Andrew Schroedter 08-28-2009

Suburban industrial portfolio sells for $21.2 million - By Andrew Schroedter 08-28-2009

Suburban industrial portfolio sells for $21.2 million
By Andrew Schroedter
Crain's Chicago Business
August 28, 2009

A Boston pension advisory firm paid $21.2 million for a five-building industrial portfolio in the western suburbs, a sign that the moribund investment sales market might be improving.

TA Associates Realty LLC paid about $54 a square foot for the buildings, which are in Elmhurst and Glendale Heights and total 391,551 square feet. The deal closed earlier this month, said Kenneth Szady, an executive director at Cushman & Wakefield Inc. who represented TA Associates and the seller, New York-based Morgan Stanley Prime Property Fund.

The largest of the five properties is a fully leased 125,831-square-foot building at 847 N. Church Court in Elmhurst. The entire portfolio is about 95% leased.

A representative for TA Associates, which has been an active buyer of Chicago-area properties in recent years, could not be reached for comment.

“This is a prime example that the market is opening,” Mr. Szady says. “We’re starting to see some closings.”

That wasn’t the case in the second quarter, when Chicago-area industrial sales dipped about 10% to $79.3 million, compared to the prior period, not counting Microsoft Corp.’s $185-million acquisition of a massive west suburban data center, according to New York research firm Real Capital Analytics Inc.

A majority of buyers these days are likely to be well-capitalized institutional investors who aren’t as reliant on the lending markets, says Andy James, a partner in the local office of Nevada-based real estate investment firm DP Partners, which wasn’t involved in the portfolio sale.

“Financing is still difficult to obtain,” Mr. James says. The recovery will come “when guys with debt are going to be able to get back in the game. That’s the piece we haven’t seen in bulk.”

A Morgan Stanley spokeswoman said the transaction is not a sign that the company is exiting the Chicago-area market. She declined to comment further.

Morgan Stanley acquired the five buildings in two deals in 2004 and 2005. One sale involved other properties.

The other four properties TA Associates bought are in Glendale Heights: a 75,210-square-foot building at 179 Internationale Blvd., a 63,492-square-foot building at 250 Windy Point Drive, a 63,720-square-foot building at 268 Windy Point Drive, and a 63,720-square-foot building at 310 Windy Point Drive.


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