O’Hare Area Industrial Market Report

Warehouse & Distribution Spring/Summer 2008

Too Much Space......

Not enough demand
In our past O’Hare newsletters, we noted that land values for
industrial sites had reached an all time high. In Cook County,
prices ranged from $21.00 to $23.50 PSF and in DuPage
County from $23.00 to $26.00 PSF. The range in prices
depended on the shape of the site and over all suitability for
development (i.e. soil conditions, topography). In DuPage
County, lower real estate taxes contributed to higher prices.

Under Construction O'Hare Developments

January 1, 2008
The impact of the downturn is reflected in lease transactions
Development Name City Developer SF
for speculative warehouse buildings in the last two
Des Plaines Cargo Center Des Plaines Panattoni 90,780 years. The majority of these deals involved smaller users
Chase Avenue Redevelopment Elk Grove Village First Industrial 129,432 under 70,000 SF. The majority of the larger transactions
Lake Center Corporate Park Mount Prospect Alter 108,732 landed as build-to-suit opportunities, such as the Coaster
Lake Center Corporate Park Mount Prospect Alter 147,932 Company of America (253,410 SF) and Forward Air Truck
25th Street Redevelopment Melrose Park Korman & Lederer 131,786 Terminal (125,000 SF) transactions. Since these deals were
Rose Street Redevelopment Schiller Park ML Realty 128,837 signed, there has been marginal speculative development
Total 737,499 activity. Deals in the past 6 months include Levantina USA
(44,660 SF) and NVC Logistics (40,000 SF) in Bensenville
and Corporate Express (44,185 SF) in Franklin Park. The
Even during the dramatic increase in land values and the relatively smaller size of these transactions and negative
redevelopment of infill O’Hare sites, developers and investors absorption hardly have developers excited to continue fighting
questioned, “How deep is the air freight market?” Unfortunately, to pay upwards of $20.00 PSF for land redevelopments.
their concerns have became reality as the redevelopment
bubble burst. A possible strategy for building owners looking to sell in the
next two to three years who want to preserve maximum value
The downturn is the direct result of the combination of
minimal absorption of existing space coupled with the
numerous planned and under construction developments. Proposed O’Hare Developments
There are 12 proposed facilities that total 2,145,083 SF, 6
Development Name City Developer SF
facilities under construction totaling 797,499 SF, and 19 newer
IAC O'Hare Business Center Des Plaines IAC 300,000
facilities totaling 2,468,885 SF that are ready for immediate
Seymour Avenue Redevelopment Franklin Park Centerpoint 265,122
occupancy. These projects represent as much as 5,400,000
SF of available industrial space sitting vacant as a result of Busse/Landmeier Distribution Elk Grove Village ProLogis 260,768

the turndown in demand. Busse/Devon Distribution Elk Grove Village ProLogis 231,176
Bensenville Business Center Bensenville Ridge 214,000
At this time, the effect of the downturn has not yet been Ellis O'Hare Logistic Center Bensenville Washington Prop. 205,540
quantified from a property value view point as there have not Ellis Street Redevelopment Bensenville AMB 173,000
been any recent sales in this cool market. Waveland Avenue Redevelopment Franklin Park Centerpoint 142,477
Arthur Avenue Redevelopment Elk Grove Village First Industrial 142,000
Dierking Terrace Redevelopment Elk Grove Village Gullo 100,000
Addison Avenue Redevelopment Franklin Park Ridge 84,000
Truck Terminal Redevelopment Des Plaines Panattoni 27,000
Total 2,145,083

(Continued on page 4)
Featured Warehouse
& Distribution Availabilities
100,000 Square Feet & Larger Map Location Total SF Available Total Building Size City Clear height Loading Docks Rental Rate

A 112,735 325,045 Franklin Park 30’ 12 $5.50 net

Class 6B tax incentive in place, located only minutes from O’Hare

B 115,561 115,561 Wood Dale 22’ 16 $7.65 net

26 trailer parking positions available, 15,000 SF of office is on second floor

C 306,918 306,918 Bensenville 26’ 48 $4.75 net

Building easily divides in half, 12” floors in 150,000 SF

D 111,272 111,272 Elk Grove Vlg. 21’6” 12 $5.15 gross

Sublease available through August 31, 2009, 15,750 SF air conditioned warehouse space

E 115,785 115,785 Itasca 22’ 10 $4.80 net

Elgin O’Hare Expressway frontage, recently renovated

50,000 – 100,000 Square Feet Map Location Total SF Available Total Building Size City Clear height Loading Docks Rental Rate

F 80,000 80,000 Des Plaines 20’ 8 $6.50 gross

Additional 3 acres of land available for outdoor storage, building expansion or trailer/car parking

G 67,932 67,932 Wood Dale 24’ 22 $7.50 net

Trailer parking or additional car parking available, recently renovated

H 57,285 90,000 Elk Grove Vlg. 18’ 6 $4.65 net

Lunch room and locker rooms make it ideal for users with large number of warehouse employees

I 80,360 80,360 Bensenville 28’ 29 $7.99 net

Brand new distribution building ideally located only minutes from O’Hare south cargo entrance

J 58,513 58,513 Itasca 22’ 6 $5.75 net

Frontage on Irving Park Road making it ideal for users that have a showroom

20,000 – 50,000 Square Feet Map Location Total SF Available Total Building Size City Clear height Loading Docks Rental Rate

K 21,333 21,333 Bensenville 20’ 2 For Sale

Additional 0.75 acres of land available for outdoor storage, building expansion or trailer/car parking

L 35,908 35,908 Elk Grove Vlg. 20’ 2 $5.25 net

Entire property recently renovated; warehouse walls painted, floor sealed and offices remodeled

M 48,516 48,516 Itasca 18’ 4 $5.00 net

Easy access to expressways, interior of warehouse recently renovated

N 30,000 30,000 Elk Grove Vlg. 16’ 2 $6.75 gross

Warehouse is partially air conditioned, versatile office space that can be renovated to fit any use

O 22,050 22,050 Des Plaines 18’ 2 $5.35 net

Free standing building in the heart of Des Plaines industrial park

5,000 – 20,000 Square Feet Map Location Total SF Available Total Building Size City Clear height Loading Docks Rental Rate

P 15,000 15,000 Bensenville 20’ 1 For Sale

Tenant in place until Spring of 2009, excellent opportunity for user/investor

Q 11,166 & 10,237 69,000 Des Plaines 17’ 3 $7.50 gross

Excellent visibility on Touhy Avenue, direct access to I-90 and I 294

R 16,176 43,958 Wood Dale 14’ 4 $5.00 net

Excellent location with both visibility on four way interchange as well as easy access to highways

S 16,932 16,932 Elk Grove Vlg. 14’ 1 $7.75 gross

Building and/or parking is expandable, 1,800 SF of heated storage shed not included in total square footage

T 17,600 17,600 Itasca 18’ 6 $4.95 net

Freestanding building on large land site that can be used for trailer parking

All information is subject to verification and no liability for errors or omissions is assumed.
Prices are subject to change and listings may be withdrawn without notice.

2
 Mount Prospect
58 58

Des Plaines
72 90
O 294
F
eva 290

53
Pleasant
H Prairie
83 72 Q
WISCONSIN S

I L L I N O I S Elk Grove N D
173
Village L 173 137

E 41 I
12 T Rosemont
M Itasca R 131
O‘Hare 90
19 B International
Waukegan
Fox Lake 294
G K Airport
190
J Gurnee
C
132
MCHENRY COUNTY

31 53 134
P
LAKE COUNTY

120

20
McHenry 120 120 Schiller
Wood Park
tock 290 60
Dale
137
North Chicago
Libertyville 19
Bensenville A
Mundelein
Crystal Lake 355
Wauconda 294
7
Addison Franklin
60
Cary Park
31
294
14 43

NRY COUNTY
Buffalo Grove
LAKE COUNTY
E COUNTY COOK COUNTY 94
Glencoe
62 68

Algonquin Northbrook
53
12 83
O’Hare Area Properties
31
14
62
90
Evanston
59 58
Schaumburg 58 94
72
El in
Elgin 90 DesPlaines 21
290
12/45 Ni s
Niles
N
20
19 Elk Grove
53
Village
K COUNTY
COOK O‘Hare
G C
DUPAGE O
COUNTY Roselle 90

Bartlett
rt 19
20
19 90
St.
S Charles
ha 290 83 294 94
West
C
Chicagoo Carol
a 43
64 Stream
r
Addison
o k
Northlake 64
64
Elmhurst
E rs O k Parkk
Oak
12/455 20
DUPAGE COUNTY
NTY
TY

83 a
Maywood
KANE COUNTY
NT

290
355
59
88 Chicago
25 Wheaton
heaton Ci
Cice
Cicero
55 94
Aurora
A u 88 34 294 McC
Co k
McCook 90
L e
Lisle
Naperville
rvil Downers
Downers
53 Grove
r
Midway Airport
Mid A o
355

B Ridge
Bu
Burr Ridgge 50 94
P
DUPAGE N
COUNTY
CO Woodridge
ge
Woodridge 55
90 Lake Michigan
U
WILL COUNTY
W 294 Oak Lawn
Oak

59 Boling k
Bolingbrook 1

Oswego 57
Chicagoland Map
171 45

25
Lemont
O’Hare Area Industrial Market Report
First Quarter 2008

O’Hare Overall Vacancy O’Hare Absorption

in percent in hundred thousand SF Statistics
4.37 Market Size (SF) 114,233,530
10.01 10.37 11.13 Overall Vacant Space (SF) 12,709,192
9.86
8.74 0.90
Overall Vacancy 11.13%

-1.64
4Q07 Absorption (SF) -859,933
YTD Absorption (SF) -1,497,100
Direct Net Rental Rate $3.00 - $8.50
-9.12 -8.59
YTD Under Construction 674,007
4Q06 1Q07 2Q07 3Q07 4Q07 4Q06 1Q07 2Q07 3Q07 4Q07

Major O’Hare Lease Transactions *Italics denotes NAI Hiffman transactions

Tenant Address Size (SF) Comments
Coaster Company 255 Wille Road, Des Plaines 253,000 BTS Lease
Dealer Tire 3708 River Road, Franklin Park 132,000 Lease
Savino del Bene 1905 Mt. Prospect Road, Des Plaines 125,000 Lease
Houston Harvest 1010-1050 Sesame St., Bensenville 120,708 Renewal
Shelter Distribution 1530 Birchwood, Des Plaines 47,000 Lease
Levantina 850 Devon, Bensenville 44,660 Lease
Corporate Express 11101 Franklin Ave, Franklin Park 44,185 Lease
NVC Logistics 371 Meyer, Bensenville 40,000 Lease
Grainger 850 Devon, Bensenville 26,500 Lease

Major O’Hare Sales Transactions

Address Size (SF) Price (mil) Price (PSF) Buyer Seller
3708 River Road, Franklin Park 325,000 $20.8 $64 TA Associates CenterPoint Properties
2301 Lunt Ave., Elk Grove Village 260,000 $15.3 $59 AMB Property AW Mendenhall
1800 Bruning, Itasca 202,000 $19.0 $94 Inland Real Estate Group Bradley Associates
854 W Irving Park Rd., Itasca 133,410 $6.25 $48 Mr. David’s Carpet Serv. TST Impreso
1301 Estes Ave., Elk Grove Village 123,618 $4.5 $37 Ridge Property Trust HC Brill Co., Inc.
751 Rohlwing Rd., Itasca 109,450 $5.3 $44 Crawford Supply Trust
1949-51 Arthur Ave., Elk Grove Village 105,000 $4.5 $43 Libra Industries CenterPoint

(Continued from page 1)

Existing O'Hare Developments
for their property in a downturn market could be a January 1, 2008
short-term sale/leaseback. This sale structure will
Development Name City Developer SF Available Total SF
help mitigate the risk for developers who are not
prepared to redevelop sites now and would rather O'Hare Logistics Center Bensenville Seefried/Rreef 36,641 107,800
O'Hare Logistics Center Bensenville Seefried/Rreef 80,360 80,360
wait to see how the market reacts to the oversupply
Elk Grove Building #1 Elk Grove Village ML Realty 251,076 251,076
of product. In the interim, the sale/leaseback Elk Grove Building #2 Elk Grove Village MIRVAC 251,076 251,076
structure will help with “carrying” the building until Pratt Avenue Center Elk Grove Village Private 48,500 103,175
the market absorbs the 5,400,000 SF of current and Belmont Business Center #2 Franklin Park Private 120,000 179,161
soon to be available warehouse inventory. Franklin Avenue Center Franklin Park Ridge 45,336 90,151
O'Hare Distribution Center Franklin Park Duke 88,060 88,060
Franklin Park Distribution Center Franklin Park Washington 73,160 73,160
The next 12 to 24 months should prove to be critical
O'Hare Business Center East Franklin Park TA 112,735 325,045
with respect to the absorption of warehouse space O'Hare East Business Center Franklin Park KTR 195,071 195,071
and how it affects the future value of industrial land O'Hare East Business Center Franklin Park KTR 199,223 199,223
within the O’Hare market. As stated, the effect of Seymour Avenue Center Franklin Park Centerpoint 42,000 227,280
this overbuilt market has yet to be quantified from a Briarwood Business Center Mount Prospect ING 237,350 237,350
property value stand-point as there have not been Briarwood Business Center Mount Prospect ING 111,498 228,097
Whitehall Drive Center Northlake Centerpoint 251,584 251,584
any recent sales of redevelopment sites since the
IAC O'Hare Distribution Center Elmhurst IAC 250,000 250,000
market cooled. Most likely, land prices should drop IAC O'Hare Business Center Des Plaines IAC 48,215 48,215
back into the high “teens” considering the lack of Meyer Road Business Center Bensenville Seefried/Rreef 27,000 67,000
interest from developers.  Total(s) 2,468,885 3,252,884

4
O’Hare Area
Industrial Market Report
About the Authors
Brian W. Colson tel 630 691 0619
Executive Vice President & Partner fax 630 932 7258
Industrial Services Group bcolson@hiffman.com
Scope of Services Experience:
Brian W. Colson is an Executive Vice President and Partner with NAI
Hiffman. Brian specializes in industrial real estate including representing
property owners, tenants and buyers in the greater Chicagoland area
helping to create real estate solutions. Brian’s primary areas of focus
include properties within the O’Hare and West suburban industrial
markets.
Among the companies Brian has represented in sale and lease
transactions are Allied Building Products, Alcoa, CenterPoint Properties,
AMB Property Corporation, Panattoni Development Corporation, The
Fogelson Companies, DAL Tile, Forward Air, Heritage Industries, Heads
and Threads International, K&M Plastics, Overhead Door Company,
Inc., Roadway Trucking, Savino Del Bene, and XL Screw Corporation.
Brian is actively involved with the Association of Industrial Real Estate
Brokers (AIRE), and in 2004, AIRE honored Brian with the coveted
Frank Mahoney Award for Excellence. This award recognizes the top
producing member who has been a broker for 5 years or less. Over
the past three years, Brian completed industrial transactions, valued in
excess of $150,000,000. He is also actively pursuing both the SIOR
and CCIM designations.
Prior to joining the firm, Brian gained exposure to the field of real estate
working as a Senior Commercial Real Estate Appraiser for First Real
Estate Services, Inc. and LaSalle Appraisal Group. He has six years of
work experience in the valuation of real estate for a variety of purposes
including bankruptcy, estate, ad valorem and internal planning. He is
also experienced in appraising industrial facilities, apartment complexes,
nursing homes, shopping centers, office buildings, commercial buildings
and vacant land.
Education:
St. Mary’s College, Bachelor of Arts
Professional Affiliations and Designations:
Real Estate Salesperson, Illinois
Recipient of Association of Industrial Real Estate Brokers (AIRE)
2004 Frank Mahoney Award of Excellence
Association of Industrial Real Estate Brokers (AIRE), Member
Commercial Certified Investment Member, Candidate
Young Industrial Brokers, Member
Eric W. Fischer tel 630 693 0677
Senior Associate fax 630 932 7258
Industrial Services Group efischer@hiffman.com
Scope of Services Experience:
Eric W. Fischer has been with the Industrial Services Group at NAI
Hiffman since 2003. Eric is responsible for identifying build-to-
suit opportunities, generating tenant and property representation
relationships and leasing existing industrial properties throughout
the Chicago metropolitan area. His primary area of focus includes
properties in the O’Hare and Northern Cook County markets.
Eric has represented companies such as Dulin Metals, Libra Industries,
Shelter Distribution, Marantec America, Dal Tile, California Closets,
Public Storage, Prinz International, Hyper Microsystems, CenterPoint
Properties, Panattoni Development Corporation, The Missner Group,
Sitex Realty Group and TA Realty Associates.
Eric is a licensed real estate salesperson and is an active member of
the Association of Industrial Real Estate Brokers (AIRE), and was the
Managing Director of the Young Industrial Broker (YIB) organization
from 2004 through 2007.
Prior to joining the firm, Eric received his Masters of Business
Administration (MBA) with a concentration on Real Estate Investment
and Finance from DePaul University. He has also gained sales and
project management experience from working for Rosborough
Partners, Inc., a landscape contracting firm.
Education:
DePaul University, MBA
Real Estate Investments & Finance
University of Illinois, BS
Professional Affiliations & Designations:
Real Estate Salesperson, Illinois
Young Industrial Brokers (YIB) - Member
Association of Industrial Real Estate Brokers (AIRE) – Member
Certified Commercial Investment Member (CCIM) – Candidate
DePaul University Real Estate Alumni Association – Member
International Air Cargo Association of Chicago (IACAC) - Member
5
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Please detach here and mail or fax to either:

Brian W. Colson Eric W. Fischer NAI Hiffman
tel 630 691 0619 tel 630 693 0677 One Oakbrook Terrace, Suite 600
fax 630 932 7258 fax 630 932 7258 Oakbrook Terrace, IL 60181
bcolson@hiffman.com efischer@hiffman.com www.hiffman.com

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O’Hare Area Industrial Market Report

Spring/Summer 2008

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