In recent news in Chicago an affiliate of Hackman Capital Partners, LLC, a company based out of Los Angeles who specializes in real estate investing purchased a new portfolio filled with industrial buildings through the metropolitan Chicago area. They purchased up to six different buildings. Five of these building are at about 90% occupied. The newest acquisitions will increase Hackman Capital’s presence in the Midwest and represent about seven million square feet of a total of 25 million square feet they already own. The newest purchase puts the amount of square feet at around 906,984 worth of real estate.
The company is planning on leasing the vacancy they currently have in the new buildings they have just purchased. This is just one of the many deals that has happened from the 2015 to 2016 Chicago industrial realm.
2015 and Beyond
Professionals around the area are wondering if the New Year will be as prosperous as the years before hand. The performance of 2015 was unprecedented and a lot of land and real estate was being exchanged throughout the industrial scene.
2016 will not be living up to the year that 2015 has with the same amount of volume and trading going on. Some analysts predict that land constraints off of I-55 will drive development over to I-80 and I-88. Also rental growth will be more closely related to how the economy is doing rather than the amount of supply in regards to industrial buildings.
Investing activity will continue to grow and be strong for stable industrial assets around the area. On the other hand there are some analysts who believe that 2016 will be good for a year of trading industrial assets. Neal Driscoll a manager and vice president at Liberty Property Trust believes that 2016 could be a great year as long as there are not any major financial issues or economic problems on a mass level. He believes that 2016 will have a similar year to 2015. There is going to be a lot of activity with buildings ranging from 100,000 to 200,000 square feet. There will also be developments on industrial land because there is a lack of it.
Because of all of this it will drive up the demand even great in the Chicagoland area. Other than these redevelopments the decrease in demand may come from developers heading to other markets and that is what the main fear is. For example one of the analysts think that with the economic uncertainty of Illinois others may be driven to seek out other marketplaces for industrial growth.
These areas would include places like the neighboring states of Wisconsin and Indiana. Even so with increased internal investments this may be able to mitigate any potential losses that might be faced by the industrial real estate market in the Chicago area. 2016 has two different paths it could take, either continuing the trend of 2015 or falling off and not having that big of a year.