By Cari Brokamp CHICAGO-Gold Eagle has signed a ten-year lease for 170,000 square feet at 4404 West Ann Lurie Place. The manufacturer and marketer of engine additives took more than half of the 311,000-square-foot former Dominick's Finer Foods distribution facility in the lease, which was valued at more than $6 million. Updated with TPO roofing, T5 lighting, new docks, ESFR sprinklers, and energy-efficient heating systems, the building is owned by KTR Capital Partners, who acquired it in December 2007 for $14.5 million.
Gold Eagle sought modern space with multiple docks near its headquarters at 4400 South Kildare Blvd. The company's new property is six miles from downtown Chicago, offering frontage along and proximity to Interstate 55, as well as 72 loading docks. Asking lease rates at the property are around $4.95 per square foot net, and NAI Hiffman continues to market the remaining space in the building, which features 30 exterior docks.
KTR Capital Partners was represented by EVPs Larry Much and Stephen J. Connolly, along with associates Irvin Malik and Kelly Disser, all with NAI Hiffman’s Industrial Services Group, while Gold Eagle was represented by Steven Goode of Venture One Real Estate LLC and Sally Macoicz with Cushman & Wakefield. "They had their headquarters where they've been for the last 40 years just two blocks away, so the proximity certainly helps," Much tells GlobeSt.com. "What KTR did to the building, like putting a new roof on, made it better and much more efficient for Gold Eagle."
Gold Eagle's new distribution facility shares its 17-acre property with a 175,000-square-foot build-to-suit warehouse being developed by KTR for Preferred Freezer. The $39-million project was planned to become the first industrial building in the city of Chicago to achieve LEED Platinum certification and deliver by September. Preferred Freezer signed a 25-year lease for the 57-foot clear facility, which was originally planned as a spec development and at that time marketed for $7.25 per square foot net.
"Between the Gold Eagle lease and the lease we did with Preferred Freezer, those are probably two of the largest new industrial leases done in the last year," Much says. "This is a pretty big lease size for today, and I don't know many other industrial leases where a company moves and absorbs that kind of space. It's been challenging to find a user of that size."
The property is in an area of limited available land on the southside of Chicago, close to Interstate 55 in the Crawford Industrial Park, which houses around 100 other buildings. "What makes the whole park more appealing to me is the four-way interchange (at Pulaski Avenue) which was replaced seven years ago and is state-of-the-art," Much says. "There is access to the city, access to labor, and you can distribute regionally or nationally."
The park is located in the south Chicago submarket, where the occupancy rate include sublease space is around 90%, according to Grubb & Ellis' mid-year industrial market report. Average asking lease rates are around $4 per square foot in the submarket, Grubb's research says.
"In the market, I'm seeing a bit of a pent-up demand, where people had held off on making decisions and I think we're starting to see a little bit of a switch where more tenants are coming out," Much says. "A tenant today should go out there and negotiate the best deal for them leasing-wise. I don't think it's going to get much better than it is now, and I think it's going to switch back soon."