MDH Partners today announces the acquisition of the Chicago Infill Net Lease Portfolio (“the Portfolio”), comprising six industrial buildings and one secured trailer lot totaling 1.3 million square feet in Bedford Park, Illinois, an industrial suburb of Chicago. This deal represents the firm’s first expansion into Illinois. Houston Hawley served as the acquisition lead for MDH Partners. CBRE represented the seller.
“The acquisition of this robust portfolio introduces MDH Partners to the highly sought-after Chicago industrial market for the first time,” said MDH Partners’ Hawley. “Bedford Park is an unparalleled location close to the urban core and surrounding communities, offering a strong local labor pool and convenient access to highway, rail and air infrastructure. As Chicago’s industrial sector continues to post historically low vacancy rates, we are pleased to enter the market with this strategic investment, and we look forward to continuing our expansion throughout the Midwest as we invest in logistical hubs throughout the United States.”
The buildings range in size from 120,000 square feet to 380,000 square feet, and are situated on a combined 64.42 acres. The facilities feature clear heights ranging from 22 to 28 feet and a secured trailer lot with over 150 stalls.
The Portfolio is located in the Bedford Park neighborhood of Chicago, which is approximately three miles south of Midway International Airport with direct access to the Belt Railway, the largest intermediate switching terminal railroad in the United States. The Portfolio offers close proximity to I-55 and I-294, providing users convenient access to both the local Chicago and regional markets. The properties are highly desirable for manufacturing and distribution users, due to immediate access to strong local labor pools and transportation cost efficiencies.
The Portfolio is 96 percent leased to seven tenants, and has a weighted average lease term of 5.8 years remaining with an average tenant tenure of 20 years. Tenants for the six industrial buildings include Heligear Acquisition Co., an aerospace component manufacturer; Trimark Marlinn, a foodservice equipment supplier; Power Stop, an automotive supply company; Nexus Distribution, a third-party logistics operator; Westrock CP, a global paper and packaging company; and Bus & Truck of Chicago, Inc., a large vehicle service shop. The 150-stall secured trailer lot is leased by FedEx Ground Package Systems, Inc.
The Chicago industrial real estate market has seen continued growth and record-breaking demand this year. According to CBRE, the Chicago industrial market saw 13.3 million square feet of space absorbed in the second quarter, up from 4.7 million square feet of positive absorption in the first quarter. This brings the year-to-date total to 18 million square feet of space absorbed, a record-high amount of net absorption for this point in the cycle.