Chicago firm enters local industrial market with two big deals

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A Chicago firm’s decision to spend more than $40 million to buy 21 distribution buildings on the northwest side further illustrates the strength of the Indianapolis area’s industrial market.

CrossLake Partners, a joint venture between principals of Colliers International’s Chicago office and a Windy City real estate investment firm, bought the buildings earlier this month in two transactions.

REW Park 100 industrial dealCrossLake's acquisition in Park 100 amounted to 440,000 square feet of multi-tenant industrial space. (IBJ Photo/Scott Olson)

It purchased 12 properties totaling 656,000 square feet—10 in Corporate Center North and two in Zionsville Business Park—from California-based CalEast Global Logistics LLC for $24.3 million.

CrossLake also spent $18.4 million to acquire nine buildings totaling 440,000 square feet in Park 100 from Duke Realty Corp.

The $42.7 million investment marks CrossLake’s first foray into the Indianapolis area, said David Kahnweiler, CEO of Colliers’ Chicago office.

“We’ve always been in the mode of acquiring real estate, particularly in Chicago, but we see a big opportunity in what the institutions call the tertiary markets,” he said. “Many of the institutions don’t want to be in the smaller Midwestern markets.”

Corporate Center North at West 71st Street and Interstate 465 was developed in 1980. Ranked as the area’s 19th-largest industrial park, it totals 675,000 square feet and is 82 percent leased, according to IBJ statistics.

The much-larger Park 100, developed starting in 1972 by locally based Duke Realty, totals 7.9 million square feet and is 97-percent occupied.

The publicly traded company declined to comment on its sale of the Park 100 buildings, citing corporate policy that prohibits discussing acquisitions and dispositions until after quarterly earnings calls with analysts. Duke Realty’s next call is May 1.

But industrial brokers say Duke Realty is shedding smaller, multi-tenant industrial buildings in favor of larger, single-tenant warehouses larger than 300,000 square feet.

“It was a strategic exit for Duke,” said Pete Anderson, an executive vice president at the Indianapolis office of Chicago-based Becknell Industrial. “As Duke has become a bigger player, they’ve made a strategic decision to move out of those [smaller buildings].”

The Park 100 portfolio purchased by CrossLake includes three single-tenant buildings totaling 142,394 square feet and six multi-tenant buildings totaling 296,740 square feet.

Becknell, which owns 100 industrial buildings in 30 states, entered the local market last year by buying a 250,000-square-foot industrial building in the Axcess70 Business Park north of the Interstate 70 and Mount Comfort Road interchange in Hancock County.

It now plans to construct two buildings on a speculative basis totaling 500,000 square feet on 30 acres it purchased in the North by Northwest industrial park just north of Park 100. Becknell could break ground on the first building in May, Anderson said.

The flurry of activity supports a report from the local CBRE office showing the industrial market is off to a strong start in 2014.

In the first three months, the market absorbed 718,000 square feet, increasing the overall occupancy rate slightly, to 92.9 percent.

A few of the larger lease deals signed in the first quarter: Ford Motor Co.’s 281,000 square feet at Airwest Business Park in Plainfield;  Weaver Popcorn’s 240,000 square feet at AllPoints at Anson in Whitestown; and Chep Pallets’ 212,000 square feet in Franklin Township on Indianapolis’ southeast side.

In addition, two massive build-to-suit projects were announced in the first quarter. Wal-Mart (1.3 million square feet) and Temperpedic (760,000 square feet) have agreed to have facilities constructed in AllPoints Midwest, the joint venture between Browning Investments and Duke Realty, nearly doubling the size of the industrial park from 2.1 million square feet to 4.1 million square feet.

There hasn’t been this much building activity in the local industrial market since 2007, said Andrew Morris, an industrial broker at Summit Realty. But this time it’s different.

“Ninety percent of that new construction [then] was speculative,” he said. “Right now, two-thirds is for build-to-suits with leases already signed or, in rare instances, someone is buying the building.”

Cassidy Turley has been retained by CrossLake as the leasing agent for its buildings in the Park 100 and Corporate Center North industrial parks.

“It’s a very strong endorsement for the strength of our industrial market,” Jeff Castell, a Cassidy Turley principal, said of CrossLake’s entrance into the market.


  • Hendricks New Load?
    This article mentions three new tenants at the Airwest Business Park in Plainfield. I believe Hendricks has an Airwest billing point. I'm not sure if Ford, Walmart and Temperpedic would be their customers.

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  1. to mention the rest of Molly's experience- she served as Communications Director for the Indianapolis Department of Public Works and also did communications for the state. She's incredibly qualified for this role and has a real love for Indianapolis and Indiana. Best of luck to her!

  2. Shall we not demand the same scrutiny for law schools, med schools, heaven forbid, business schools, etc.? How many law school grads are servers? How many business start ups fail and how many business grads get low paying jobs because there are so few high paying positions available? Why does our legislature continue to demean public schools and give taxpayer dollars to charters and private schools, ($171 million last year), rather than investing in our community schools? We are on a course of disaster regarding our public school attitudes unless we change our thinking in a short time.

  3. I agree with the other reader's comment about the chunky tomato soup. I found myself wanting a breadstick to dip into it. It tasted more like a marinara sauce; I couldn't eat it as a soup. In general, I liked the place... but doubt that I'll frequent it once the novelty wears off.

  4. The Indiana toll road used to have some of the cleanest bathrooms you could find on the road. After the lease they went downhill quickly. While not the grossest you'll see, they hover a bit below average. Am not sure if this is indicative of the entire deal or merely a portion of it. But the goals of anyone taking over the lease will always be at odds. The fewer repairs they make, the more money they earn since they have a virtual monopoly on travel from Cleveland to Chicago. So they only comply to satisfy the rules. It's hard to hand public works over to private enterprise. The incentives are misaligned. In true competition, you'd have multiple roads, each build by different companies motivated to make theirs more attractive. Working to attract customers is very different than working to maximize profit on people who have no choice but to choose your road. Of course, we all know two roads would be even more ridiculous.

  5. The State is in a perfect position. The consortium overpaid for leasing the toll road. Good for the State. The money they paid is being used across the State to upgrade roads and bridges and employ people at at time most of the country is scrambling to fund basic repairs. Good for the State. Indiana taxpayers are no longer subsidizing the toll roads to the tune of millions a year as we had for the last 20 years because the legislature did not have the guts to raise tolls. Good for the State. If the consortium fails, they either find another operator, acceptable to the State, to buy them out or the road gets turned back over to the State and we keep the Billions. Good for the State. Pat Bauer is no longer the Majority or Minority Leader of the House. Good for the State. Anyway you look at this, the State received billions of dollars for an assett the taxpayers were subsidizing, the State does not have to pay to maintain the road for 70 years. I am having trouble seeing the downside.