It’s been a remarkable 18-month run in the Kansas City industrial market. Developers are being rewarded for their patience and long-term land positions, and larger tenants finally have several options from which to choose among Class-A distribution facilities. In January 2013, the vacancy rate in the Kansas City industrial market was a tight 6 percent, with barely any product available for users searching for modern distribution space of 200,000 square feet or more. At that time, I made some predictions about new construction, vacancy and absorption. Let’s review what happened. Market Drivers Kansas City recorded more than 3.5 million square feet of positive absorption in 2013 alone, adding another 800,000 square feet during the first two quarters of 2014. This demand was driven in large part by the automobile suppliers, online retailers and by governmental agencies. At mid-year, the vacancy rate for Kansas City warehouse product had fallen to 5.6 percent, well below the national average of 7.3 percent. Average lease rates have moved up to pre-recession levels, as regional distributors and third-party logistics companies attempt to secure large blocks of space for their national footprints. In 2013, the market delivered 2.4 million square feet of new industrial product, with …
Midwest
ST. LOUIS PARK, MINN. — Dougherty Mortgage LLC has arranged a $10.9 million HUD 223 (f) loan for the refinancing of e2 Apartments, a 58-unit market-rate rental property in St. Louis Park. The apartment community, which is located at 3920 Excelsior Blvd. approximately six miles from downtown Minneapolis, features energy efficient designs with oversized windows. Floor plans range from studios to two-level penthouse plans. Dougherty structured the 35-year loan with a 35-year amortization schedule for the borrower, Ellipse II LLC.
CARPENTERSVILLE, ILL. — Leopardo Cos. Inc. has broken ground on a new 27,000-square-foot child and family center for Children’s Home + Aid in Carpentersville, approximately six miles north of Elgin. The site for the facility is at 229 Lake Marian Road. The Jerri Hoffmann Child + Family Center will rebuild the existing Tom Thumb Community Childcare Center, which has been serving at-risk children and families in the Carpentersville area since 1970. The new facility will expand the center’s capacity from 110 to 230 students. The center will include 15 classrooms, a gross motor skills room, outdoor play area, administrative spaces, staff lounge and kitchen. Leopardo is serving as general contractor on the project, which is set for completion in early summer 2015. Designhaus Inc. is providing architectural services for the project.
SCHAUMBURG, ILL. — Adelphia Properties has arranged the $4.2 million sale of a triple-net-leased, single-tenant Joe’s Crab Shack restaurant in Schaumburg. The property is located at 2000 E. Golf Road. The property sold at a 6.5 percent capitalization rate. Joe’s Crab Shack is the sole occupant of the 7,500-square-foot, freestanding building, which was built in 1994. George Spirrison & Simeon Spirrison represented the seller, a private group. An out-of-state investment group purchased the property in a 1031 tax-deferred exchange.
BELPRE, OHIO — Marcus & Millichap has arranged the $1.7 million sale of a 6,895-square-foot property in Belpre. The net-leased Advance Auto Parts property is located at 1218 Washington Blvd. The asset is a newer construction and has 14 years remaining on the corporately guaranteed lease. Craig Fuller, Erin Patton and Scott Wiles of Marcus & Millichap’s Columbus office listed the property on behalf of the seller, a limited liability company. A California-based buyer purchased the property in a 1031 tax-deferred exchange.
CHICAGO — The Blackhawk Investment Group LLC has acquired 2730 N. Ashland Ave. in Chicago for $6.3 million. The building is fully leased and consists of 18 luxury apartment units and a heated parking garage. Each unit features granite countertops, stainless steel appliances, Jacuzzi bathtubs and crown moldings. Units on the upper floors have views of the Chicago skyline. Blackhawk acquired the property with 1031 tax-deferred exchange proceeds from a shopping center recently sold in Minnesota.
OMAHA — NorthMarq Capital has secured a $1.6 million loan for the refinancing of Alliance Group Office Building, a 24,304-square-foot office building in Omaha. The property is located at 2566 Leavenworth St. Gary Rifkin of NorthMarq Capital’s Omaha regional office structured the 15-year loan with a 15-year amortization schedule. NorthMarq arranged financing for the borrower, 2566 Leavenworth LLC through its relationship with Assurity Life Insurance Co. Alliance Group is the major tenant of the property.
ROSEMONT, ILL. — Morgan / Harbour has completed a 26,000-square-foot office build-out for Resolution Life, a life insurance company, in Rosemont. The new offices are within the Columbia Centre I building located at 5600 N. River Road. The construction features full-floor improvements including new private offices, focus rooms and conference rooms. Morgan / Harbour also designed and engineered all new mechanical, electrical and plumbing systems to optimize the building’s performance. The new space also features a new training room and large open office areas. Morgan / Harbour’s construction team was led by Ben Warriner, Andy MacMillan and Mike Costanzo. INTERFORM provided architectural services for the project.
LEE’S SUMMIT, MO. — Lee & Associates has arranged a long-term lease for a 28,000-square-foot industrial site in Lee’s Summit, approximately 19 miles southeast of Kansas City. The 10-acre property is located at 221 Chipman Road. Ben Boyd and Nathan Anderson of Lee & Associates Kansas City represented the Landlord, RL Sweet Lumber. Kessinger Hunter Commercial Real Estate represented the tenant, Boise Cascade Building Materials, a producer of engineered wood products and plywood.
PLEASANT PRAIRIE, WIS. — Cushman & Wakefield has arranged the sale of 8201 104th St., a 44,398-square-foot flex building in Pleasant Prairie’s LakeView Corporate Park. The 2,400-acre master-planned, mixed-use development consists of industrial, office and retail properties. Quest Products purchased the property for a $3.6 million initial investment, with an additional $1.5 million investment anticipated within the next three years. Cushman & Wakefield’s Chicago-based team of Whit Heitman, Sam Badger and Brad Weiner represented Quest. Ryan Bain, Keith Puritz, Brett Kroner and Zach Graham of CBRE represented the seller, a local private investor. The company, a packaged consumer goods producer specializing in retail, e-commerce and drop-ship distribution, is currently based in Gurnee, Ill. Quest operates an additional distribution facility in Independence, Iowa. Both facilities will be consolidated into this new headquarters location situated on more than 4.6 acres. Built in 1994, the property features a 22,267-square-foot, two-story office component and 24-foot clear ceiling heights in the 22,131-square-foot warehouse component. The site has parking for 107 cars and has the potential for future expansion.