A huge warehouse southwest of Chicago has sold for more than $104 million, setting the high mark for any single-building industrial sale in the area this year.
The deal shows that top-tier industrial properties throughout the country can remain hot commodities, even amid a slowdown in overall real estate deals because of rising interest rates and inflation.
An affiliate of Bank of America this month paid $104.4 million for the warehouse at 3851 Youngs Road in Joliet, Illinois, according to Will County property records.
The seller was Nuveen, the investment manager of the Teachers Insurance and Annuity Association of America, which bought the warehouse in Clarius Park Joliet for $71.5 million in 2018.
The building has just over 1 million square feet, all of which is leased to appliance maker Whirlpool, according to CoStar data.
Nuveen was able to sell the warehouse at a significant profit despite a slowdown in transactions this summer that caused some deals to stall and some properties to sell for lower prices than sellers previously anticipated.
Despite those challenges, the overall volume of industrial sales this year already is $4.5 billion, topping the full-year 2020 total of $4.2 billion, CoStar data shows. Chicago-area industrial sales totaled a record $8.5 billion last year.
Nationally, this year’s completed sales total $71.3 billion, almost $3 billion above 2020’s full-year total, according to CoStar. Last year’s $124.7 billion in sales was a record.
Industrial demand and pricing have grown to historically high levels during COVID-19, which led to some product shortages and surges in e-commerce orders. That in turn has caused many corporations to beef up their network of distribution centers. Some companies have moved manufacturing operations back to the United States from abroad, further increasing warehouse demand.
Representatives of Charlotte, North Carolina-based Bank of America and Chicago-based Nuveen did not immediately respond to requests to comment on the Joliet sale, which was previously reported by Crain’s Chicago Business.
The Chicago area’s three biggest single-building industrial sales of 2022 have been in and around Joliet, including another one in Clarius Park Joliet: Avison Young Investment Management’s $96.8 million purchase of a Lion Electric vehicle plant at 3835 Youngs Road in January.
Until Bank of America’s purchase, the largest sale had been Ares Industrial Real Estate Income Trust’s $102.5 million purchase of an Amazon warehouse in Channahon, Illinois, in July.
Other big industrial deals in the Chicago area have included EQT Exeter’s approximately $380 million purchase of eight warehouses in Illinois and just across the border in Wisconsin and TradeLane Properties’ $97.5 million deal for a fully leased, 13-building portfolio in the Chicago suburbs.