The developers of a brand-new refrigerated warehouse in Pilsen have cashed out for a healthy profit, selling the property for nearly $62 million to a New York investment firm.
A joint venture between Chicago-based Clarius Partners and Wanxiang America Real Estate Group, a unit of a Chinese auto-parts company, sold the 227,000-square-foot building at 2357 S. Wood St. to an affiliate of Gramercy Property Trust, according to Cook County property records.
The cold-storage facility is fully leased to Preferred Freezer Services, a New Jersey-based refrigerated warehouse owner. The building, which employs 52 people, opened in May, according to a statement from Mayor Rahm Emanuel about a ribbon-cutting event there. It’s one of two buildings in Pilsen Park, an industrial development that Clarius and Wanxiang launched in 2014.
Gramercy, a real estate investment trust, paid $61.9 million for the building, county records show. The project cost $45 million, according to the mayor’s statement.
The deal underscores the strength of the industrial real estate market, and the cold-storage sector specifically. Investors are paying up for warehouse properties, and demand for space among shipping and e-commerce tenants is especially strong.
The local vacancy rate for cold storage space is also low and rents continue to rise, said Brian Niven, principal at Bridge Development Partners, a Chicago-based industrial developer that is leasing a new cold-storage facility it built in Northlake.
“There really isn’t much space available right now,” he said.
But demand for refrigerated warehouse space never really declines, Niven said. Cold-storage tenants typically store perishable food in the buildings, and people need to eat regardless of the economy, he said.
“You’re going to eat steak when things are good and ground beef when things are bad,” Niven said.
A Wanxiang executive declined to comment, referring a reporter to a Clarius representative, who didn’t return a call. A Gramercy representative also didn’t return a call.
Gramercy owns more than 65 million square feet of industrial space around the country and more than 5 million square feet in the Chicago area, its second-largest market based on square footage.
Clarius and Wanxiang also are building a 156,000-square-foot warehouse in Pilsen Park that’s expected to be completed in 2018. Clarius specializes in industrial development, while Wanxiang, a domestic real estate investment arm of Chinese auto parts manufacturer Wanxiang Group, oversees a diverse national portfolio that includes the new office tower at 150 N. Riverside Plaza and the Ace Hotel in the Fulton Market neighborhood.
Niven’s surname has been corrected in this updated story.