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Chicago Industrial Real Estate Market Conditions
Presenters & Submarkets
Geoffrey Kasselman, SIOR, LEED AP Executive Managing Director, National Industrial Practice Leader NGKF Introduction NGKF Chicago Overview
Felipe Valdez Research Analyst Chicago Area Overview
Ryan Kehoe Director Far North Near North
Brian Carroll Senior Vice President O’Hare
Melissa Porcelli, LEED Green Associate Senior Associate I-55 Corridor I-80 Corridor
Company Overview
BGC has offices in more major global markets:
New York*
London
Beijing
Chicago
Copenhagen
Dubai
Hong Kong
Houston
Istanbul
Johannesburg
Mexico City
Moscow
Nyon
Paris
Rio de Janeiro
Sao Paulo
Seoul
Singapore
Sydney
Tokyo
Toronto
Zurich
Newmark Grubb Knight Frank is a part of BGC Partners, Inc. (NASDAQ: BGCP), a
leading global brokerage company primarily servicing the world’s wholesale financial
and real estate markets.
BGC’s brokerage business originates from one of the oldest and most established
franchises in the financial services industry, Cantor Fitzgerald, which was founded in 1945
– Over 1,500 brokers and salespeople serve the world’s largest banks and other
institutional clients in brokering approximately 200 different financial products
including rates, credit, foreign exchange, equities and other products across two dozen
locations globally
– Since Newmark Grubb Knight Frank became part of BGC, real estate services has
come to represent approximately one-third of BGC’s revenues
– BGC had approximately $1.8 billion in revenues in 2012
– BGC's clients include many of the world's largest banks, broker-dealers, investment
banks, trading firms, hedge funds, governments, corporations, property owners, real
estate developers, and investment firms
* Corporate Headquarters
Company Overview
20 04
BGC Partners LP, a wholesale voice brokerage Business, is created
05
Maxcor/ Eurobrokers New York, London
and Tokyo Rates ~325 brokers ETC Pollock 70 Brokers in Paris Rates, Credit
Aurel Leven ~75 brokers in Paris Equity derivatives AS Menkul Istanbul Turkish equities and
electronic bonds
06 07
Marex Financial (a)
London, Johannesburg Equity derivatives
emerging markets
08
Radix Energy Singapore OTC Energy
10
Mint Partners/ Mint Equities (b)
London Mainly Equities,
also Credit ~100 brokers
11
Newmark Knight Frank (c)
Across United States 425 Brokers Commercial RE
09
Liquidez Brazil 70 brokers FX and Rates
12
Grubb & Ellis (d)
Across United States Property & Facilities
Management Commercial RE ≈ 400 brokers
13
Sterling United Kingdom Rates Ginalfi Paris Credit, Swaps Smith Mack Philadelphia Commercial RE Frederick Ross Denver Commercial RE
14
Cornish & Carey Commercial San Francisco Commercial RE
Real Estate Services
Financial Services
(a) BGC acquired Marex Financial’s emerging markets business
(b) BGC acquired various assets and businesses of Mint Partners and Mint Equities
(c) BGC acquired all of the outstanding shares of Newmark & Company Real Estate, Inc., which operates as “Newmark Knight Frank” in the United States and is associated with London-based Knight Frank
(d) BGC acquired substantially all the assets of Grubb & Ellis.
Company Overview
BGC Partners, Cantor Fitzgerald, and Newmark Grubb Knight Frank
Company Overview
BGC Partners Inc., Newmark Grubb Knight Frank, Cantor Fitzgerald and Cantor Commercial Real Estate
Newmark Grubb Knight Frank is an important part of BGC’s portfolio as BGC continues to
support, grow and invest in the real estate services segment
NGKF’s connection to BGC provides access to an extensive roster of financial services
relationships and cross-selling opportunities
– CCRE, our lending business, has originated $5.4 billion of loans since its inception in 2010
– CCRE’s experience and client base creates cross-selling opportunities for NGKF
The integration of our debt and equity placement expertise throughout NGKF allows us to
offer owner and developer clients help with acquisition financing, construction financing, or
recapitalizing their own real estate
Support from a substantial research team across each entity
NGKF Industrial Practice
Tenant and Landlord Representation
Buyer and Seller Representation
Property Management
Strategic Planning
Building Repositioning
Facility Assessment
Logistics Evaluation
Project and Construction Management
Financial and Economic Incentives
Financial Analysis
Drive Time Studies, Geographic Searches, and
Zoning Issues
Operational Efficiency
Sustainability
Technology and Innovation
300+ NGKF Industrial Professionals
in the United States
117 NGKF Industrial Professionals
Worldwide through our
partnership with Knight Frank
Recruiting Spotlight
Greg Wright Senior Managing Director
Chicago, IL
34 years in industrial real
estate sales
Track record of over $900
million in completed
transactions
Average sales and listings
annually of 1,000,000 SF
Services Overview
NGKF Industrial - Chicago
Date Type City St Size
01/2014 Direct Lease Bedford Park Il 270,789 SF
02/2014 Direct Lease Schaumburg IL 4,570 SF
02/2014 Direct Lease Schiller Park IL 16,500 SF
03/2014 Lease Bolingbrook IL 45,220 SF
03/2014 Lease Franklin Park IL 660 SF
03/2014 Lease Franklin Park IL 3,009 SF
03/2014 Lease Franklin Park IL 375 SF
03/2014 User Sale Chicago IL 1,100 SF
03/2014 Direct Lease Elk Grove Village IL 21,584 SF
04/2014 Lease Extension Milwaukee WI 182,250 SF
04/2014 Direct Lease Rosemont IL 6,084 SF
04/2014 User Sale Chicago Ridge IL 65,000 SF
04/2014 User Sale Wood Dale IL 116,400 SF
04/2014 Lease Franklin Park IL 2,470 SF
05/2014 Lease Elgin IL 54,153 SF
05/2014 User Sale Schaumburg IL 15,000 SF
05/2014 Direct Lease Elgin IL 3,400 SF
05/2014 Lease Streamwood IL 6,049 SF
05/2014 Lease Melrose Park IL 150,000 SF
Total +/- 1 Million SF
Market Presence
Total volume of approximately 1 million SF through
18 completed transactions since January 2014
37 active listings for industrial properties which
represents approximately 2.0 million square feet of
availability
11 active listings for miscellaneous property types
YTD Transactions
NGKF Industrial - Chicago
1001 N. Mittel Drive Wood Dale, IL
116,140-square-foot single-tenant Class-A
industrial building sale transaction completed in
May 2014
Bristol Group completed its due diligence and
funded the acquisition within a four-week timeline
The seller was exclusively represented by Ken
Szady, Brian Carroll and Tom Gath of Newmark
Grubb Knight Frank
Bristol Group has retained the brokerage services
of Brian Carroll and Tom Gath at Newmark Grubb
Knight Frank to market the building
Chicago Industrial OVERVIEW
Chicago Industrial Market Map
Chicago Industrial Market
Q1 Market Overview
Total Inventory 1,064,216,228 SF
Under Construction 9,786,163 SF
Total Vacancy 8.90%
1Q14 Absorption 1,389,612 SF
Total Asking Rent $4.62/SF Net
Warehouse/Dist Asking Rent $4.04/SF Net
4%
6%
8%
10%
12%
14%
$3.40
$3.80
$4.20
$4.60
$5.00
$5.40
1Q09 1Q10 1Q11 1Q12 1Q13 1Q14
Asking Rent (Price/SF) Vacancy (%)
Asking Rent & Vacancy
-4,000,000
-2,000,000
0
2,000,000
4,000,000
6,000,000
1Q09 1Q10 1Q11 1Q12 1Q13 1Q14
Net Absorption (SF)
Absorption
0.0
4.0
8.0
12.0
16.0
20.0
2009 2010 2011 2012 2013 2014 2015
Deliveries Under Construction Projected Deliveries
Square Feet, millions
Construction & Deliveries
Far North & Near North
Submarket: Far North
Q1 Market Overview
Total Inventory 100,477,931 SF
Under Construction 2,683,370 SF
Total Vacancy 9.90%
1Q14 Absorption 220,261 SF
Total Asking Rent $5.16/SF Net
Warehouse/Dist Asking Rent $4.49/SF Net
Net Absorption
978,350
-24,754
205,723
1,200,449
465,437
-224,743
688,263
534,357 395,149
-500,000
-250,000
0
250,000
500,000
750,000
1,000,000
1,250,000
1Q12 1Q13 1Q14
Net Absorption (SF)
Submarket: Far North
Notable Lease Transactions (YTD)
Address 3818 Grandville Avenue Gurnee, IL 60031
Tenant Metropolitan Graphic Arts
Size 183,415 SF
Address 3818 Grandville Avenue Gurnee, IL 60031
Tenant Woodland Foods
Size 155,325 SF
Address 28160 N. Keith Drive Lake Forest, IL 60045
Tenant Popcorn Factory
Size 77,294 SF
1
2
3 3
1 2
Submarket: Near North
Q1 Market Overview
Total Inventory 54,415,727 SF
Under Construction 0 SF
Total Vacancy 6.50%
1Q14 Absorption 85,067 SF
Total Asking Rent $6.02/SF Net
Warehouse/Dist Asking Rent $5.16/SF Net
Net Absorption
115,368 71,064
178,159
337,434
-371,956
189,144 237,015
122,778 85,067
-500,000
-400,000
-300,000
-200,000
-100,000
0
100,000
200,000
300,000
400,000
500,000
1Q12 1Q13 1Q14
Net Absorption (SF)
Submarket: Near North
Notable Lease Transactions (YTD)
Address 730-770 S. Acco Plaza Wheeling, IL 60090
Tenant Segerdahl Graphics Inc.
Size 285,880 SF
Address 7410-7420 N. Lehigh Niles, IL 60714
Tenant SPC
Size 138,161 SF
Address 1852-1854 Elmdale Avenue Glenview, IL 60026
Tenant Crimson AV
Size 54,884 SF
1
2
3
3
1
2
O'Hare Submarket
Submarket: O’Hare
Q1 Market Overview
Total Inventory 120,141,858 SF
Under Construction 765,975 SF
Total Vacancy 7.30%
1Q14 Absorption 515,336 SF
Total Asking Rent $5.63/SF Net
Warehouse/Dist Asking Rent $4.66/SF Net
Net Absorption
-447,804
719,585
355,022 266,944
758,206
1,014,237
753,901 718,706
515,336
-600,000
-300,000
0
300,000
600,000
900,000
1,200,000
1Q12 1Q13 1Q14
Net Absorption (SF)
Submarket: O’Hare
Notable Lease Transactions (YTD)
Address 591 Supreme Bensenville, IL 60106
Tenant Boise Cascade
Size 201,395 SF
Address 950-990 Supreme Bensenville, IL 60106
Tenant Channel Distribution
Size 201,011 SF
Address 1501 Michael Wood Dale, IL 60191
Tenant Hyper Microsystems Inc.
Size 174,000 SF
1
2
3
1 2
3
Address 1285 Hamilton Parkway Itasca, IL 60143
Tenant Diversified Labeling
Size 171,000 SF
4
Notable Land Transactions (YTD)
Location Elk Grove Village
Buyer Dupont Fabros
Use Data Center
Size 14 Acres
Sale Price $20/SF
Location Elk Grove Village
Buyer Forsythe Group
Use Data Center
Size 15.2 Acres
Sale Price $19/SF
4
I-55 & I-80 Corridors
Submarket: I-55 Corridor
Q1 Market Overview
Total Inventory 91,956,041 SF
Under Construction 3,367,765 SF
Total Vacancy 8.60%
1Q14 Absorption -733,016 SF
Total Asking Rent $4.53/SF Net
Warehouse/Dist Asking Rent $3.98/SF Net
Net Absorption
-264,744
488,594
1,023,357
158,141
549,227
275,333 443,249
-585,450 -733,016
-1,200,000
-800,000
-400,000
0
400,000
800,000
1,200,000
1Q12 1Q13 1Q14
Net Absorption (SF)
Submarket: I-55 Corridor
Notable Lease Transactions (YTD)
Address 901 Carlow Drive Bolingbrook, IL 60490
Tenant Ferrara Pan Candy
Size 747,152 SF
Address 1450 Remington Boulevard Bolingbrook, IL 60490
Tenant Midwest Warehouse & Distribution
Size 650,494 SF
Address 715 Theodore Court Romeoville, IL
Tenant Innotrac Corporation
Size 421,361 SF
1
2
3
1
2
3
Submarket: I-80 Corridor
Q1 Market Overview
Total Inventory 66,352,757 SF
Under Construction 1,848,600 SF
Total Vacancy 15.20%
1Q14 Absorption 632,817 SF
Total Asking Rent $3.44/SF Net
Warehouse/Dist Asking Rent $3.20/SF Net
Net Absorption
85,890 329,467
-37,818 -283,572
400,981
-651,881
441,033
2,237,964
632,817
-1,000,000
-500,000
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
1Q12 1Q13 1Q14
Net Absorption (SF)
Submarket: I-55 Corridor
Notable Lease Transactions (YTD)
Address 26416 Centerpoint Drive Elwood, IL 60421
Tenant Partners
Size 440,000 SF
Address 1515 Olympic Boulevard Joliet, IL 60431
Tenant Falken Tire
Size 214,600 SF
Address 3451 S. Chicago Street Joliet, IL
Tenant Otis Elevator
Size 209,179 SF
1
2
3
1
2
3
Submarket: I-80 Corridor
Notable Lease Transactions (YTD)
Address 26416 Centerpoint Way Elwood, IL 60421
Tenant Partners
Size 440,000 SF
Address 1515 Olympic Boulevard Joliet, IL 60431
Tenant Falken Tire
Size 214,600 SF
Address 3451 S. Chicago Street Joliet, IL
Tenant Otis Elevator
Size 209,179 SF
1
2
3
1
2
3
8750 W. Bryn Mawr Suite 700
Chicago, IL 60631 773.957.1400
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