Marcus & Millichap is pleased to present the opportunity to acquire the portfolio located at 7940 to 8010 ½ New Jersey Avenue in Hammond, Indiana, anchored by the current owner, Meyer Distributing Incorporated. The subject portfolio consists of approximately 74,674 square feet of warehouse space and is situated on 3.43 acres of land. The four-building asset features five dock-high doors, seven drive-ins, and clear heights ranging from 10’ to 18’. Upon sale of the property, Meyer Distributing plans to lease back 7940 New Jersey Avenue for five years with 3 percent annual rent escalations.
As a triple-net leaseback, the new owner will be responsible for the roof, building structure, parking lots, and HVAC replacement. Tenant responsibilities will be confined to quarterly HVAC service and proportionate management fees. Current tenants, Hydraulic Component Services, Incorporated and Johnstone Supply plan to fulfill their current leases, which run through June 2024 and December 2026, respectively. With an occupancy of 92.2 percent, the sale also provides investors a value-add opportunity by leasing up the property.
Located just off Interstate 80/94 between the Kennedy Avenue and Cline Avenue exits, the property is primely situated within Chicago’s Indiana submarket. Containing 47 million square feet of industrial space, Indiana is a large submarket anchored by manufacturing tenants, occupying nearly 50 percent of all space. U.S. Steel and utility provider, NiSource, have a major presence in the submarket, with each employing about 6,000 workers. Thanks to the proximity of U.S. Steel, railroad companies also serve as major tenants in the submarket with multiple manufacturing facilities.
Among comparable properties in the 10,000 to 75,000-square-foot range, the vacancy rate in Indiana sat at just 1.8 percent at the conclusion of Q3 2022. The high barrier-to-entry helped push market rents during Q3 to near record highs at 7.4 percent annually among comparables. While nearly 5.3 million square feet of industrial space was under construction in the submarket at the start of Q4 (representing 11.3 percent of inventory), all but 12,000 square feet was concentrated in large properties over 100,000 square feet (CoStar). As rising diesel prices encourages more goods to be transported via rail, the Indiana submarket stands to benefit from the ongoing inflationary environment.
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
JOSH CARUANA
Indiana Broker of Record
600 East 96th Street, Ste. 500
Indianapolis, IN 46240
Tel: (317) 218-5300
Josh.Caruana@MarcusMillichap.com
License #: RB14034355
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: ZAD0370654)
