One of the biggest industrial sales in Illinois happened in the final month of 2023. That’s when Chinese battery maker Gotion paid $137.4 million for a former Kmart distribution warehouse south in Chicago in Manteno, Illinois.
Gotion has plans to transform the property into a $2 billion manufacturing facility that will make lithium batteries for electric vehicles on the site at 333 S. Spruce St. According to Gotion, the facility will create 2,600 jobs.
Transformco Properties, the real estate arm of Sears’ parent company, was the seller. Transformco in 2017 closed the Kmart warehouse that stood on the site.
How did this deal come together? Sam Durkin, managing director in industrial services for JLL, said that a bit of good fortune was involved.
Transformco had listed the Manteno property previously, but eventually took it off the market. At the time of the sale, Transformco was using the facility as a third-party logistics site when Gotion contacted the company. Gotion was considering sites in the Chicago area and was interested in Transformco’s property.
That bit of serendipity is rare, Durkin said.
“Transformco was using the building at the time and not looking to sell,” he said. “To find an end user that needs a building of this size, one of the largest buildings in the broader Chicago industrial market, is not easy. Finding a user of this size that would need every square foot of a building like this is extremely rare. Gotion thought it would be a perfect fit.”
Gotion was also considering a large facility in the Joliet market, Durkin said. But the battery maker decided that the positives of the Manteno site were too difficult to pass up.
“They saw value in the large campus,” Durkin said. “Even though it is from 1990, it is a well-built functional building. There is infrastructure that they can re-use. When they compared it to the other asset, this one made more sense.”
It helped, too, that the state of Illinois kicked in financial incentives worth $536 million to help bring Gotion to the area. One of Gov. J.B. Pritzker’s priorities is to make Illinois a key player in the electric vehicle manufacturing market.
Durkin said that the strong labor market based in Kankakee County and the Joliet area was another positive for Gotion.
“You had an existing building here,” Durkin said. “Gotion didn’t have the time to create a new facility. That wasn’t an option for them. Obviously, taxes are cheaper in Kankakee County than they are in Cook and the other collar counties, too.”
Durkin said that the electric vehicle industry is an unusual one because it is growing so large so quickly. This means that end users can’t always wait for a facility designed specifically for them. Instead, they often need to find an existing building that can meet their day-one operational needs while providing space for future expansion and growth, Durkin said.
While the Transformco-Gotion deal ranked as one of the largest industrial sales in the Chicago market during the last several years, don’t expect it to be a rarity. Durkin said that Illinois, like most other states, is working to attract more companies working in the elective vehicle space. And these companies will need large industrial facilities in which to base their operations.
“This is definitely something that is going to continue,” Durkin said. “We are going to continue to see other projects in this space come in behind this one.”