With the assistance of Colliers International, IDI Logistics has sold a fully leased, 2.4 million-square-foot portfolio of industrial assets to Granite REIT for $195 million. The collection consists of four Class A facilities in metropolitan Chicago, Memphis, Tenn., and Cincinnati, all of which had been development projects of IDI.
Across the U.S., the industrial sector continues to be an investor favorite, and Colliers welcomed an eager crowd of potential buyers when marketing the group of assets on behalf of IDI.
“There was a robust response to the offering with three finalists for the portfolio,” Steve Disse, principal with Colliers International, told Commercial Property Executive. “Primary bidders were domestic pensions and private equity. There was cross-border interest demonstrated by the fact that Granite REIT, a Canadian company, bought the portfolio.”
Disse and Colliers Midwest Industrial Investment team members Jeff Devine, Tyler Ziebel and Alex Cantu spearheaded the disposition effort along with regional Colliers professionals.
All four properties in the portfolio are sited in key submarkets within premier master-planned business parks. The Chicago-area asset is an approximately 454,300-square-foot facility located at 1243 Gregory Drive in Antioch, Ill. Developed within the 100-acre Antioch Corporate Center in 2015, the property is home to two tenants. In metropolitan Cincinnati, the approximately 678,400-square-foot building at 60 Logistics Blvd. in Walton, Ky., made its debut in 2007 as part of the sprawling Park South logistics park.
The portfolio’s remaining two buildings are located 25 miles southeast of Memphis in Olive Branch, Miss., a leading distribution market, where developable land is now becoming harder to find. Totaling roughly 408,200 square feet, 12577 Stateline Road reached completion in 2016 and the 861,300-square-foot facility at 8740 South Crossroads Drive opened its doors in 2014 and accommodates three tenants. Granite is believed to have financed the purchase with cash on hand.
A seller’s market
IDI Logistics could not have anticipated that its properties would be so hotly vied for when the company developed the assets between the years of 2007 and 2016.
“The portfolio traded in excess of seller expectations and is another example of how strong the industrial investment sale market is in the U.S.,” Disse said. “The three markets that the buildings are in—Chicago Cincinnati and Memphis—are regarded as Tier One distribution markets in the U.S. and buyers recognized this as they pursued the opportunity.”
There continues to be a flurry of sales activity in the industrial market, with transaction volume having reached a record $51.9 billion at midyear, according to a report by Colliers International. Deal activity remains on the upswing, and the pace is reflected in the prices. In the second quarter of 2021, the average sales price per square foot had increased by 24.1 percent year-over-year.