HOUSTON — CBRE has arranged a 34,000-square-foot industrial lease in southwest Houston. The tenant, industrial parts distributor Merit Brass, will occupy space at The Business Center at Five Corners, a five-building, 550,000-square-foot development. Nathan Wynne, Joseph Smith and Savannah Smith of CBRE represented the landlord, a partnership between locally based developer Levey Group and ANICO Eagle, in the lease negotiations. Reed Parker of Lee & Associates represented Merit Brass.
By John Cassidy and Calvin Gunn, Lee & Associates If you love a good groundbreaking photo — full of shiny shovels, hard hats and smiling development teams — you may be disappointed this year, for all the best reasons. With Chicago’s most recent wave of speculative industrial projects currently being delivered, the market now actually has space to offer industrial tenants — a refreshing change from the past few years. With construction costs and interest rates continuing to rise and credit availability shrinking, many developers with ties to Chicago are pausing new projects as exit cap rates are becoming more difficult to predict. At the same time, market fundamentals are starting to cool from the pandemic-era eruption of demand. The good news: Chicago’s industrial market may be down from the clouds, but it’s still historically quite healthy. Vacancy rate in perspective According to Lee & Associates of Illinois’ second-quarter industrial snapshot, construction deliveries caused the Chicago industrial vacancy rate to tick upward for the second consecutive quarter. However, a 3.68 percent vacant market is still considered a historically low vacancy environment. As a comparison, that vacancy rate measured about 12 percent at the end of 2009 and 6.6 percent in …
RICHARDSON, TEXAS — Lee & Associated has negotiated a 12,271-square-foot industrial lease at Grove Business Park in the northeastern Dallas suburb of Richardson. Jessica Reinhardt and George Tanghongs of Lee & Associates represented the landlord, an entity doing business as Dallas North Industrial LLC, in the lease negotiations. Byron McCoy of Younger Partners represented the tenant, automotive paint specialist English Color & Supply LLC.
ROUND LAKE, ILL. — Lee & Associates has brokered the $1.5 million sale of an 18,600-square-foot retail center in Round Lake, a far north suburb of Chicago. The renovated property, located across from Round Lake METRA station, is fully occupied by five tenants, including a banquet hall, barber shop, café, toddler indoor playground and martial arts studio. Rick Scardino of Lee & Associates represented the buyer, La Luz Bakery. Tyler Dechter of Baum Realty represented the seller, Mon Ami Realty LLC.
BATAVIA, ILL. — Cynamic Chemical Co., a chemical manufacturer, has renewed its 20,124-square-foot industrial lease at 1400 Kingsland Drive in the Chicago suburb of Batavia. Michael Androwich of Lee & Associates represented the tenant. Mapletree owns the building.
GURNEE, ILL. — Bullfrog International, a designer and manufacturer of high-end hot tubs, has inked a new lease for 10,840 square feet at Gurnee Town Center in Gurnee, a far north suburb of Chicago. Rick Scardino, Michael Petrik and Sean Bishop of Lee & Associates represented the tenant. Branden Reedy and Jimmy Danaher of CBRE represented the landlord, Kite Realty. Lee & Associates also assisted Bullfrog International with a lease in Vernon Hills earlier this year.
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Lee & Associates’ Second-Quarter 2023 Economic Review by Sector
Lee & Associates’ newly released 2023 Q2 North America Market Report outlines industrial, office, retail and multifamily outlooks trends in the United States. This sector-based review of commercial real estate trends for the second quarter of the year examines the difficulties facing each property type and where opportunities in the landscape may be emerging. Troubles with absorption dogged each sector, with the exception of retail, throughout the first half of 2023. Scheduled deliveries for industrial, office and multifamily indicate this trend will continue throughout much of the United States for the foreseeable future. Lee & Associates has made the full market report available here (with further breakdowns of factors like vacancy rates, market rents, inventory square footage and cap rates by city). The summaries from each sector below provide high-level considerations of the overall outlook and challenges in the market. Industrial Overview: Industrial Growth on Track for Least Gain in Years In a reversal from the ballooning logistics capacities required during the pandemic, demand for industrial space has slowed across North America. After continuously rebuilding inventories from the fall of 2021 through the third quarter of last year, many retailers and wholesalers are taking a breather, pausing further inventory accumulation out of caution over …
BARTLETT, ILL. — Lee & Associates has brokered the sale of a 3.4-acre vacant lot near the southeast corner of West Bartlett Road and Route 25 in the Chicago suburb of Bartlett. The sales price was undisclosed. A new multi-story, self-storage facility is planned for the site. Rick Scardino of Lee & Associates represented the seller, Abbott Land. Dan Lynch of Colliers represented the buyer, Berman-Lapetina.
DALLAS — Lee & Associates has negotiated a 25,564-square-foot industrial lease near Dallas Love Field Airport on the city’s northwest side. According to LoopNet Inc., the single-tenant property at 9151 King Arthur Drive was built in 1966. Mark Graybill of Lee & Associates represented the landlord, Trio Pines, in the lease negotiations. The representative of the tenant, Lighthouse Fence Supply, was not disclosed.
LONG BEACH, CALIF. — Lee & Associates has successfully finalized a 10-year lease for a 10,812-square-foot creative office space at Airway Office Park in Long Beach. The tenant, Swing Set Productions, a creative production studio serving top brands, will relocate from Huntington Beach to this new studio. The Airway Office Park, developed by Urbana Real Estate Development, offers more than 60,000 square feet of office space and amenities. The project is currently under construction and scheduled for completion late this month. Jeff Coburn and Shaun McCullough of Lee & Associates Los Angeles – Long Beach represented the landlord, Airway Office Park LLC. Michael Shuken of Savills represented the tenant. The value of the lease is about $5 million.