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Sugar Grove, IL

Hy-Tek Manufacturing Company

Address:
1998 Bucktail Lane, Sugar Grove, IL 60554
Property Type:
Single Tenant
Price:
$3,590,000
Cap Rate:
7.49% cap
NOI:
$268,750
Square Feet:
43,000 sqft
Lot Size:
4.01 Acres
Price Per Square Foot:
$83.49
Year Built:
1975/1995
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Investment Highlights

Investment Highlights

Investment Highlights

  • Sale-Leaseback with Strong Long-Standing Tenant
  • Hands Off Eight-Year Absolute Net Lease with Zero Landlord Responsibility
  • Divisible 43,000 +/- Square-Foot Industrial Warehouse
  • One Dock-High Door, Four Grade-Level Doors and Two Additional Acres Available for Expansion
  • High Barrier-to-Entry Chicago Industrial Submarket with 5.3% Vacancy
  • Less Than Two Miles from Aurora Municipal Airport

Investment Overview

Marcus & Millichap is pleased to present the opportunity to acquire the property located at 1998 Bucktail Lane in Sugar Grove, Illinois, occupied by the current owner, Hy-Tek Manufacturing Company, Inc. (HMC). The subject property consists of approximately 43,000 square feet of space and is situated on 4.01 acres of land. The asset features one dock-high door, four grade-level doors, and two acres of land for further development. While the property is currently set up for single-tenant use, the warehouse space can be divisible to accommodate multi-tenancy. Upon sale of the property, HMC plans to sign a eight-year absolute lease. With zero landlord responsibilities, the tenant will be fully responsible for the roof, structure, parking lot, and general repairs. In business since 1984, HMC provides contract manufacturing of parts and assemblies used in a variety of industries, such as agriculture, defense, and mining.

Located less than two miles from the Aurora Municipal Airport, the property is located in the Interstate 88 West submarket, containing a massive 77 million square feet of industrial space. After dropping significantly in 2018 and 2019, demand for industrial space in I-88 West rebounded sharply starting in 2020, sending net absorption rates up to the highest level in over 20 years. As a result, the vacancy rate has steadily declined from 9.8 percent in Q1 2020 to 5.3 percent by the close of Q3 2022. With availability tightening, market rents have been rising in record territory, up 7.5 percent annually during the third quarter. In recent years, I-88 West has attracted a sizable amount of new development with 4.4 million square feet of industrial space underway at the start of the fourth quarter, representing 5.7 percent of inventory. Among the notable projects is Meta’s (Formerly Facebook) 2.4 million-square-foot DeKalb Data Center, scheduled to be delivered in 2023. Despite the stream of new developments, the vacancy rate is forecast to remain stable in the near future as demand keeps pace with new supply (CoStar).

Known as the Greater Chicagoland area, Chicago-Naperville-Elgin is the third largest metro in the nation. The metro houses 9.5 million people, including 2.7 million residents within the city of Chicago. The number of corporate headquarters in Chicago is second only to New York City and is home to 33 Fortune 500 companies. Thanks to eight commercial and passenger rail lines, the Port of Chicago, three international airports, and a vast network of freeways, Chicago is a major distribution and logistics hub. The local economy and workforce are highly diverse, supported largely by distribution, finance, manufacturing, and high-tech industries. As a multicultural city that thrives on the harmony and diversity of its neighborhoods, Chicago boasts 100 neighborhoods, 77 community areas, 50 wards, and eight major league sports teams, including two MLB teams. Chicago is a leader in reforming public schools, enhancing public safety and security initiatives, providing affordable housing in attractive and economically sound communities, ensuring accessibility for all, and fostering, social, economic, and environmental sustainability (Chicago.gov).

BROKER OF RECORD
STEVEN WEINSTOCK
Illinois Broker of Record
One Mid America Plaza, Suite 200
Oakbrook Terrace, IL 60181
Tel: 630-570-2200
Steven.Weinstock@marcusmillichap.com
License: IL 471.011175
This information has been secured from sources we believe to be reliable, but we make no representations or warranties, express or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2022 Marcus & Millichap. All rights reserved. (Activity ID: ZAD0370694)