An Atlanta-based investor has paid almost $137 million for three warehouses near Chicago in a deal that stands out during relatively low sales volume in 2024.
LXP Industrial Trust announced the sale of the three buildings in Minooka, Illinois, when it reported third-quarter earnings Wednesday. The buyer was MDH Partners, in deals that closed Oct. 31, according to Grundy County property records and CoStar data.
The big portfolio deal comes after $3.3 billion was paid over the past year for industrial properties in the Chicago area. That is well below the pace of the boom that followed the onset of COVID-19 in early 2020, which led to a peak of $4.2 billion in warehouse sales in the fourth quarter alone in 2021.
Despite strong demand, with current 5.4% vacancy about 200 basis points below the all-time average, industrial sales have lagged locally and nationally after a series of interest-rate increases slowed the pace of deals, decreased property values and pushed some investors to the sidelines.
The Federal Reserve’s first in a potential series of interest-rate cuts in September has raised hopes in real estate circles that better times could be on the horizon. The Fed announced a new quarter-point rate cut Thursday.
The combined sale price for the Minooka buildings was $136.7 million. That is slightly lower than the almost $141.1 million that the real estate investment trust paid Prologis for the buildings in deals in December 2019 and January 2020, according to property records and CoStar data.
West Palm Beach, Florida-based LXP and Atlanta-based MDH did not respond to requests for comment from CoStar News on Thursday.
The buildings are about 50 miles southwest of Chicago along interstates 55 and 80.
The warehouses have about 2.2 million square feet of space combined. The two largest buildings in the deal, at 6225 E. Minooka Drive and 1460 Cargo Court, are leased to cereal giant Kellogg, according to CoStar data. A smaller building at 200 International Parkway is leased to German carmaker BMW.
Founded in 2005, MDH has been involved in more than $6 billion in acquisitions, developments and asset management as an adviser and investor, according to the firm’s website.
The firm made a splash in 2022 when it sold a 10-state, 58-property portfolio to Singapore’s GIC for $1.26 billion.
Since then, MDH has been buying warehouses in markets including Minneapolis, Houston and throughout the Sun Belt.
MDH launched a $575 million fund in 2021, which grew to $750 million in 2022, and the firm is now investing throughout the country with a focus on the Southeast and Southwest, according to the website.