Tella Tool & Manufacturing Portfolio
- 1008 North Ridge Avenue, Lombard, IL 60148, 1015 North Ridge Avenue, Lombard, IL 60148, 245 Cortland Avenue, Lombard, IL 60148, and 3401 Nafta Parkway, Brownsville, TX 78526
- Property Type:
- Single Tenant
- Cap Rate:
- 6.47% cap
- Square Feet:
- 143,974 sqft
- Lot Size:
- 10.87 Acres
- Price Per Square Foot:
- Year Built:
- Strategically Located Industrial Warehouses With Proximate Access to Major Freeways
- Features 16’-25’ Clear Heights, 11 Dock-High Doors, and 6 Grade-Level Doors
- Tough Barrier-to-Entry Market: Average 7% Overall Vacancy and 5.5% Annual Rent Growth (CoStar)
- 12-Year Absolute Net Leaseback With Tella Tool
- Tella Tool is a Leading Metal Forming Company With Over 50 Years of Industry Experience
- Tella Tool Customer Portfolio Includes, Medical, Aerospace, Computer, Telecommunications and Defense Industries
- Customer Base in North America, South America, Europe and Asia
Marcus & Millichap is pleased to present the opportunity to acquire the four-building portfolio located at 1008 North Ridge Avenue in Lombard, Illinois, 1015 North Ridge Avenue in Lombard, Illinois, 245 Cortland Avenue in Lombard, Illinois, and 3401 Nafta Parkway in Brownsville, Texas. The subject portfolio consists of approximately 143,974 square feet of warehouse space and is situated on a total 10.87 acres of land. The asset features clear heights between 16’ to 25’, eleven dock-high doors, and six grade-level doors.
Each property is occupied by the owner, Tella Tool & Manufacturing Company, which plans on executing a 12-year absolute net leaseback upon sale of the portfolio. Tella Tool is a leading metal fabrication company with over 50 years of industry experience. Tella Tool manufactures parts for the aerospace, computer, telecommunications and automotive industries. With a global customer base, the company ships products throughout North America, South America, Europe, and Asia.
With proximate access to major freeways, the properties are strategically located in tough barrier-to-entry markets, averaging a 7 percent vacancy rate and 5.5 percent annual rent growth rate. The three Lombard properties are situated within West Suburbs, one of the largest submarkets in the nation with 40.7 million square feet. Despite the pandemic, the vacancy rate has remained relatively low and stable, sitting at 4.5 percent at the end of Q3 2021. At 5.8 percent, market rents are rising at the highest annual rate in over 20 years. West Suburbs’ strong fundamentals has attracted substantial investment, as indicative by the 790,000 square feet of industrial space under construction (CoStar).
As a multicultural city that thrives on the harmony and diversity of its neighborhoods, Chicago boasts 100 neighborhoods, 77 community areas, 2.7 million residents, 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).
The lone Texas property in the subject portfolio is located within the Greater Brownsville submarket. Market rents in Greater Brownsville are up 6.6 percent year-over-year in Q3 2021, well above the 4 percent annual average over the last five years. After trending towards a record low of 1.8 percent in Q3 2020, the vacancy rate in Greater Brownsville has jumped to 12.6 percent a year later. While alarming, the large increase in vacancies is mainly due to the new availability of one large space accounting for 7.1 percent of local inventory. However, with no industrial properties under construction, there are no supply pressures on the vacancy rate or rent growth in the near term (CoStar).
Metro Brownsville sits at the southernmost tip of Texas, comprising all of Cameron County. The metro’s location on the coast, as well as the Texas-Mexico border, make trade a large economic driver. The Port of Brownsville is a deep-water seaport that connects to the Gulf of Mexico and is a Foreign Trade Zone. Anchored by Space X, the area is also known for its growing aerospace industry. In addition to the trade and aerospace sectors, numerous hospitals and higher-education institutions drive the local economy (Marcus & Millichap).