The pending sale highlights real estate investors’ strong appetite for sprawling industrial properties, particularly those like Bradley that are located in densely populated areas and come with built-in revenue. The campus, which runs along the banks of the Chicago River’s North Branch north of Addison Street, is almost 96% leased, according to a flyer from Cushman & Wakefield, which marketed the property on behalf of the sellers.
With tenants including RCN of Chicago, several medical offices and a mix of recreational businesses such as IK Gymnastics, Windy City Ninjas and Goldfish Swim School, the 466,871 square feet of buildings on the property collectively generate $5.9 million in annual net operating income, according to the flyer.
Selling the campus for close to $210 per square foot likely nets a big return for the sellers, which have gradually leased up the properties over the past 15 years.
After paying $8.3 million in 2006 for what was then a vacant three-building portfolio on the western portion of the site, the owners filled them with tenants over the next five years and refinanced the property with a $14 million mortgage, Cook County property records show.
A separate joint venture involving Centrum and the Hansen brothers paid $6.25 million in 2010 for the 355,000-square-foot building at 2500 Bradley Place on the eastern portion of the property and leased up most of it with more than a dozen tenants before refinancing that building with a $23.4 million loan, property records show.
Rick Hansen, who couldn’t be reached for comment on the Hines deal, previously told Crain’s the owners of the buildings spent more than $40 million on various capital improvements during their ownership tenure.
In addition to the in-place income, Hines is buying a campus whose zoning allows for as much as 1.6 million square feet of development, meaning it could drastically expand the campus. The buildings could also be used as a last-mile distribution center as retailers have been willing to pay high rents for such facilities to store and distribute products people purchase online.
Hines is best known locally as a high-rise developer. In addition to its three-building Wolf Point project that includes Salesforce Tower, the firm previously developed the River Point office tower at 444 W. Lake St. and the office tower at 300 N. LaSalle St., among other high-profile Chicago projects.
A Hines spokesman couldn’t be reached for comment.
CoStar News first reported Hines’ deal to buy Bradley Business Center.