The industrial real estate market in the Chicago area remained flat in 1993, a pair of brokerage firm reports note, but the number of deals in the works at the end of the year portends a better 1994.
Grubb & Ellis said industrial vacancies at the end of the fourth quarter were 9.8 percent, unchanged from the end of 1992. The vacancy rate in the suburbs was 9.6 percent, while the lagging city market was at 10.2 percent.
A separate report from CB Commercial Real Estate, which measures only industrial properties of 100,000 square feet or more, showed vacancies increasing slightly in the last year to 8.8 percent from 8.6 percent.
But CB Commercial said that the actual amount of space leased and sold in those larger buildings in 1993 was 25.5 million square feet, up 5 percent from 1992.
Stephen Kozarits, a senior vice president with CB, said the amount of space leased or sold next year should rise to 26 million feet, with most of the increase coming in the warehouse/distribution category as opposed to the manufacturing sector.
That increase should drive vacancies in 100,000-square-foot-plus properties to 8.1 percent by year-end, according to CB’s projections.
“To look at the fourth quarter and year-end numbers, one would surmise that industrial activity in 1993 was flat at best,” said Thomas Condon, an industrial specialist with Grubb & Ellis. “But numbers alone can be somewhat deceiving and do not represent a complete synopsis of the marketplace or the perceptions of users moving forward in 1994.”
Although the vacancy numbers moved little, Grubb & Ellis said that build-to-suit deals-in which a company contracts to buy or lease a facility constructed to its specifications-picked up during the year. The real estate firm said 3.6 million square feet of build-to-suits were started in 1993, up from 3.3 million feet in 1992.
Grubb & Ellis analysts said the lack of modern industrial space in many areas is leading companies to build newer facilities, most of which go up outside of Cook County. Of 45 build-to-suit projects tracked by Grubb & Ellis, 16 were in Du Page County, 11 were in Lake County or Kenosha County, Wis., four were in suburban Cook and two in Chicago.
Getting nourishment
General Nutrition Center, one of the country’s largest retailers of vitamins and personal health products, has completed 12 leases for new stores in the area.
Edward Zifkin, director of retail leasing for Hiffman Shaffer Anderson Inc., who along with Todd Cabanban represented GNC, said the leases included a 6,000-square-foot space at the Village Crossings shopping center, Touhy Avenue and Niles Center Road in Skokie, that will serve as a prototype superstore for the retailer.
Four of the other 11 locations were in the city, as well as sites in Tinley Park, Crystal Lake, Round Lake Beach, Arlington Heights, Elgin, Hodgkins and Schaumburg.
Other leases and sales
– A local investment partnership has purchased the Finley Business Center, a 62,800-square-foot office building at 2505 S. Finley Rd. in Lombard, for an undisclosed price from Mass Mutual Life Insurance Co. working on behalf of an institutional investor. CB Commercial Real Estate Group, which arranged the sale, said the property is 86 percent occupied.
– White Cap Inc., a supplier of sealed vacuum closures to the bottling industry, has renewed its lease for 1140 31st St., a 42,000-square-foot building in Downers Grove. CB Commercial, which represented the tenant, said White Cap would expand its technical center there, increasing its office space at nearby 1101 31st St. to 22,000 feet to allow for the growth.
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Steve Kerch’s columns appear in Real Estate on Sunday and in Your Money on Thursday.
