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REA
October 02, 2019  

CenterPoint Marketing Midwest Warehouses

CenterPoint Properties is shopping an industrial portfolio in the Chicago area and Wisconsin that could fetch up to $500 million.

The package encompasses 27 buildings, totaling 5.9 million square feet, heavily concentrated along Interstate 94. Eastdil Secured and Colliers International are working together on the marketing campaign, touting it as a core-plus play. Bids are expected to reach about $85/sf, indicating an initial annual yield of 5.75%.

CenterPoint, of Oak Brook Ill., is pitching the warehouses as a package, but won’t rule out bids on chunks of the portfolio or even individual properties. Overall, the space is 94% leased, with a weighted average remaining lease term of 4.4 years. The buildings are 32 years old on average.

The bulk of the portfolio — 16 buildings totaling 3.3 million sf — is in Greater Chicago. Those properties are 89% leased, leaving room for a buyer to increase returns by filling vacant space. Many are urban warehouses, touted as well-positioned for “last-mile” e-commerce distribution. The Chicago-area industrial market, one of the nation’s strongest, has 1.4 billion sf of warehouses that were 93.8% leased at midyear, the highest level since 2001, according to a Colliers report. The average asking rent was $4.76/sf.

The rest of the portfolio — 11 buildings totaling 2.7 million sf — is in Milwaukee and its suburb of Racine, Wis. Market pros say those buildings are newer, larger and of higher quality than the Chicago-area holdings. They are also 97% leased, giving that portion of the portfolio more of a core profile.

CenterPoint owns a total of 326 buildings totaling 61.3 million sf. The company is owned by a Calpers partnership.