In Pullman, on Chicago’s Far South Facet, an investor group paid $65.1 million in December for a 144,000-square-foot distribution middle that Amazon opened about three months earlier, in line with Cook dinner County property data. Out in Palatine and in addition in December, Realterm Logistics, an Annapolis, Md.-based funding agency, paid $44.eight million for a 162,000-square-foot warehouse that opened final fall, county data present.
Identical to fairness traders who need Amazon shares of their stock portfolios, many actual property traders need Amazon of their property portfolios. Industrial actual property has been an particularly sizzling sector over the previous yr, as e-commerce has taken off and logistics, retailers and different firms have beefed up their distribution networks.
And no industrial tenant is as common as Amazon. Warehouses leased to the Seattle-based firm are likely to promote for larger valuations than different industrial buildings, in line with knowledge from Actual Capital Analytics, a New York-based analysis agency. The Pullman constructing bought for $452 per sq. foot, the best price ever paid for a Chicago-area industrial constructing over 100,000 sq. toes, in line with Actual Capital.
“There’s more demand (from investors) for these properties than there is supply,” mentioned Jeff Devine, principal and govt managing director within the Rosemont workplace of Colliers Worldwide, a member of the brokerage workforce that bought the Pullman constructing.
The robust demand—and excessive costs—may entice extra builders to place their Amazon warehouses up on the market. Amid an enormous enlargement right here by Amazon, there’s no scarcity of Chicago-area buildings leased to the tech titan.
Prior to now yr, the corporate has signed massive industrial leases throughout the world, in Chicago neighborhoods like Pullman and Gage Park and suburbs together with Downers Grove, Cicero and Melrose Park. Amazon leased 11.7 million sq. toes of business house within the Chicago space final yr, accounting for 24 % of 2020 native leasing quantity, in line with Colliers.
Some builders have already cashed out. In June, an enormous Amazon achievement middle in Kenosha bought for $176 million, the best price ever paid for a single industrial property within the Chicago space. Final fall, a brand new Amazon supply station in Gage Park bought for $42 million.
The developer that constructed and bought that warehouse, Rosemont-based Conor Business, additionally constructed the constructing in Palatine, at 315 S. Hicks Street. Realterm purchased the property from Conor, paying $277 per sq. foot, not as excessive because the price for the Pullman warehouse however nonetheless among the many most ever paid for a big native industrial property on a per-square-foot foundation.
“The ability’s cutting-edge last-mile design, excellent close by demographics and implausible freeway entry really make it a one-of-a-kind industrial alternative in one in every of Chicago’s pre-eminent northwest suburbs,” Rob Moriarty, Realterm’s affiliate vice chairman of acquisitions, mentioned in a press release.
A Conor spokesman didn’t reply to a request for remark.
The Palatine and Pullman buildings are supply stations, the ultimate cease for packages ordered via Amazon earlier than they’re loaded into supply vans and transported to prospects’ houses.
A three way partnership between Allstate, the Northbrook-based insurer, and Ryan, a Minneapolis developer, constructed the Pullman warehouse, at 10500 S. Woodlawn Ave. They bought the property to a bunch primarily of high-net-worth traders from Mexico, mentioned Paul Scott, an asset supervisor for the group and investor within the constructing.
“The investor group likes america and likes Amazon as an organization, and people amenities make good returns,” mentioned Scott, an govt at Premier Leasing & Property Administration, a Savannah, Ga.-based actual property agency.
A Ryan spokeswoman declined to remark.