New joint venture ramps up Chicago industrial investments
JLL Capital Markets closed the $55M recapitalization of a 15-building industrial and flex portfolio in the Chicago MSA
CHICAGO, April 15, 2021 – JLL Capital Markets announced today that it has closed a $55-million-plus recapitalization of a 15-building multi-use logistics portfolio totaling more than 1 million square feet of industrial and flex space throughout the Chicago area.
JLL arranged the transaction between Chicago-based real estate investor Clear Height Properties and Harbert U.S. Real Estate, an investment strategy sponsored by Harbert Management Corporation. Clear Height Properties will maintain management of the assets and retain an ownership percentage.
The new venture will seek to double the size of the portfolio by acquiring additional properties throughout the Chicago industrial market over the next 12 months.
The portfolio is approximately 90 percent leased to 127 tenants and a weighted average lease term of 2.73 years. All the assets are within various infill western Chicago Industrial submarkets, including O’Hare, North Cook County and DuPage County. This primary transportation hub allows tenants to reach an overwhelming majority of the country within a two-day’s drive. Additionally, as the only city in which all seven Class I railroads operate, tenants have access to an extensive rail system, in addition to two international airports.
JLL Capital Markets’ recent research report details how multi-use logistics assets like the properties that comprise this portfolio are seeing increased investor interest due to the irreplaceable nature of the asset sub-class and compelling rent growth profiles. Specifically, in the Chicago MSA, the average vacancy rate of these older, smaller product types is 5.3 percent, and it has outperformed the larger, bulk industrial product since 2010.
The JLL Capital Markets team representing the seller was led by Senior Director Kurt Sarbaugh and Managing Director Christopher Carroll, with assistance from Senior Director Robin Stolberg.
“These light industrial-type assets are increasingly difficult to reproduce in infill markets,” Sarbaugh said. “The underlying cost of land and the added expense associated with constructing smaller buildings and higher office finish make new supply tougher to pencil out.”
JLL Capital Markets is a full-service global provider of capital solutions for real estate investors and occupiers. The firm's in-depth local market and global investor knowledge delivers the best-in-class solutions for clients — whether investment sales advisory, debt placement, equity placement or a recapitalization. The firm has more than 3,700 Capital Markets specialists worldwide with offices in nearly 50 countries.
For more news, videos and research resources on JLL, please visit our newsroom.
JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. JLL shapes the future of real estate for a better world by using the most advanced technology to create rewarding opportunities, amazing spaces and sustainable real estate solutions for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $16.6 billion, operations in over 80 countries and a global workforce of more than 91,000 as of December 31, 2020. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit jll.com.
About Clear Height Properties
Clear Height Properties is a real estate investment company that is focused on creating value for its investors by acquiring and developing office and industrial properties throughout the Midwest. Clear Height’s full-service platform includes, acquisition, asset management, property management, leasing and project and development services. For more information, please visit clearheight.com.
About Harbert Management Corporation
Harbert Management Corporation (“HMC”) is an investment management firm focusing on alternative assets, with approximately $7.6 billion in Regulatory Assets under Management as of March 31, 2021. A privately owned firm founded in 1993, HMC serves foundations, endowments, fund of funds, pension funds, financial institutions, insurance companies, family offices, and high net worth individuals across multiple asset classes. For additional information about HMC, visit harbert.net.