A recently completed and partially leased warehouse west of Chicago sold for more than $46 million in the final days of 2024, helping cap a year of increased sales volume locally even as national activity remained flat.
An affiliate of Los Angeles-based Ares Management in late December paid $46.34 million for the 356,462-square-foot industrial building at 2200 Sullivan Road in Aurora, Illinois, according to Kane County property records.
Ares was backed by a loan of just over $31.8 million from an Invesco Real Estate affiliate, according to property records.
The seller was the building’s developer, Panattoni Development, which completed the project 2023.
Ares’ acquisition was part of about $2.5 billion in total industrial sales in the Chicago area last year, up from about $2.1 billion in 2023, according to CoStar data. That is a significant increase compared with $61.28 billion in sales last year nationwide, up only slightly from $59.6 billion in 2023 volume.
In another recent deal near Chicago, W.W. Grainger paid $78 million for a vacant warehouse alongside its existing distribution center in Minooka.
Ares is a major investor in industrial properties, and the firm sponsors two of the nation’s largest nontraded real estate investment trusts.
Last year, Ares Industrial Real Estate Income Trust refinanced a 30-property warehouse portfolio for $590 million, followed a few months later by a $475 million refinancing of a 25-property portfolio.
Those deals were signs of an improved financial outlook for the U.S. industrial property sector after leasing and property sales momentum slowed in recent years from soaring demand after the onset of COVID-19.
Like other property types, industrial sales pricing and volume has slowed from peak levels after a series of interest-rate increases by the U.S. Federal Reserve to cool inflation. The Fed’s recent decreases to the benchmark rate have been closely watched in real estate circles in the hopes that long-term borrowing costs will fall enough to boost deal activity.
“There’s a lot of interest in the industrial asset class in general, but the last 24 months have been slowed because of higher borrowing costs,” said Noel Liston of Core Industrial Realty, one of the brokers who represented Panattoni in leasing and in the sale. “Industrial is resilient. We’ll see what the Fed does in 2025.”
Ares declined to comment on the Aurora acquisition. Irvine, California-based Panattoni did not respond to a request for comment from CoStar News.
Before the sale, Panattoni signed 10-year leases with pipe joining systems firm Victaulic for 186,720 square feet and box and cartons seller Green Bay Packaging for 73,592 square feet, Liston said. Ares is seeking a tenant to fill the approximately 96,000 square feet of remaining space.
“We don’t have any leases out, but there is good activity in that size range in the [Interstate] 88 corridor,” Liston said. “Lease rates were at or better than what [Panattoni] underwrote, and they were happy to sell and move on.”
For the record
Noel Liston and Nick Krejci of Core Industrial Realty brokered the sale and are representing Ares in leasing.