Logistics Property Co. has secured $66 million in refinancing for Palatine 90 Logistics Center in Palatine, Ill., and 2800 W. Diehl Road in Aurora, Ill. PGIM Real Estate provided the fixed-rate loan that will pay off construction debt and closing costs on the assets, as well as return capital to LPC for the cross-collateralized and cross-defaulted portfolio.
According to CommercialEdge information, LPC took out a $30.7 million loan from Texas Capital Bank in May 2022, for the construction of Palatine 90 Logistics Center. The 2800 W. Diehl Road property became subject to a $24.4 million loan provided by Old National Bank in March 2022, the same source shows.
“Chicago’s industrial market is over 1 billion square feet, so owners need to differentiate their buildings by offering superior quality or a superior location,” Craig Foreman, executive director at PGIM Real Estate, told Commercial Property Executive. “As brand new, best-in-class developments with excellent proximity to labor and major transportation nodes, these assets do both.”
Two Chicago-area facilities
Palatine 90 Logistics Center is a 367,696-square-foot development approaching completion, with 36-foot clear heights, 36 exterior docks and 363 parking spaces. Situated in the Interstate 90 Golden Corridor at 975 Algonquin Road, the property is fully leased by AIT Worldwide Logistics. It will soon be home to the company’s sales, operations and warehousing teams from three different suburban offices.
The recently completed 2800 W. Diehl Road is a 392,933-square-foot building featuring 36-foot clear heights and 56 docks. LPC broke ground on the facility in 2022, on a 30.7-acre site located directly by a four-way interchange. Ryder Integrated Logistics leased the entire property in January, according to CommercialEdge.
Industrial activity in Chicagoland
“[The Chicago market] has not experienced the outsized rent growth and in turn oversupply that some other markets have and it is performing well as a result,” Foreman explained. “Chicago’s central location within the U.S. and its access to rail, air and highways, as well as a strong labor pool, are competitive advantages that will continue to attract tenants to the market through future cycles.”
As of August, Chicago led in industrial development in the Midwest for pipeline size, with 23.4 million square feet of space under construction, a CommercialEdge report shows. The metro also led the industrial sales activity in the Midwestern territories, with investors closing $1.16 billion through August.
Also in the Chicago area, LPC recently broke ground on a 664,453-square-foot industrial development in Oak Forest, Ill. Marking the developer’s 11th project in the metro, the building is anticipated to come online in the fourth quarter of this year.