Chicago Business Journal tracks Brown Commercial industrial acquisition
Chicago Business Journal, March 5, 2024 — As Chicago food industry businesses struggle to find industrial acquisitions, The Chicago Business Journal looks at Brown Commercial Group’s work to help Krishiv Foods LLC find an expansion site. Broker Matt Hanson represented the growing distributor of Indian food products in more than tripling its space with the purchase of a 31,379-square-foot building at 310-330 W. Charles Ct. in West Chicago, IL.
“Krishiv Foods was in a challenging situation as they wanted to expand their distribution capabilities and had lost out on a few industrial spaces in 2023,” said Hanson. “By expanding their geographic search into the western suburbs, we were able to secure a great off-market building that offers plenty of room for future growth.”
Krishiv Foods had missed out on a few opportunities to expand its space in 2023 due to the strong demand for space in some submarkets. Brown Commercial Group secured this space through an off-market opportunity sourced through its client network. Partner Mike Antonelli represented the seller, Spare Tire Enterprises, LLC, who originally purchased the building from Antonelli in an off-market sale in 2018. Given the significant increase in industrial building values since 2018, the seller realized a 55% increase in value. Hanson represented the buyer, who will be moving from a 9,000-square-foot space in Elk Grove Village, IL.
Chicago industrial acquisitions and fundamentals
The West Chicago industrial market is in DuPage County, which historically has experienced strong industrial demand and low vacancy rates. It is a prime area for industrial acquisitions by companies looking to capitalize on the county’s lower tax structure. According to CoStar data, the vacancy rate is 2.9%, despite 1.9 million square feet of deliveries and 1.7 million square feet of absorption in the past year. The submarket attracts many industrial tenants due to its lower tax structure compared with Cook County.
According to CoStar, logistics space accounts for the largest subtype, with 50.2 million SF in this category, followed by 15.3 million SF of specialized space and 2.7 million SF of flex space. Given the demand for space and low vacancy rate, landlords remain in the driver’s seat. Rents have increased by 6.4% from a year ago and by 24.7% over the past three years. The submarket is also a draw due to the lower rent structure, which currently averages $8.70 psf versus $9.50 psf in Chicago. There have been 45 industrial sales over the past year, averaging $87 per square foot.
According to the Chicago Business Journal story, Krishiv Foods, which employs about 20 people, will be relocating from a 9,250 SF leased space Elk Grove Village to the new site. Hanson noted that said Brown Commercial Group is subleasing the Elk Grove Village space at 802 Greenleaf Ave., as their is two years left on the lease.