Chilling out: Bridge deal adds to its cold-storage portfolio
(Crain’s) — A local investment firm is hot on cold storage. A venture including Bridge Development Partners LLC paid $14.3 million to buy a 312,000-square-foot west suburban cold storage facility and hopes to buy more such properties next year.
Oak Brook-based Bridge and capital partner Wanxiang America Real Estate Group LLC, a real estate firm backed by Chinese capital, bought the Lyons building late last month from Voorhees, N.J.-based United States Cold Storage Inc., which will remain a tenant.
The building is the third Chicago-area cold storage facility in which Bridge has an ownership interest. Such properties are used to store chilled and frozen foods during the distribution process.
“We like them because they’re typically well-leased,” says Anthony Pricco, a Bridge principal.
“Good economy or bad economy, people need to eat,” Mr. Pricco says. “Not a lot of people chase these properties, so it allows us to be a little more aggressive and buy these types of buildings. We can build a portfolio of well-leased buildings where there’s a limited supply and high replacement costs.”
Bridge wants to add refrigerated warehouses to its portfolio, he says. The new owners will spend $2 million to $3 million to replace the roof of the warehouse built in 1974, which Mr. Pricco says is otherwise in good condition.
“We feel like we got a great deal,” Mr. Pricco says. “The replacement cost on something like this would be $120 to $150 per square foot. We got it for about $45 a square foot.”
The Bridge venture used a $12-million loan from Green Bay, Wis.-based Associated Banc-Corp. to finance the purchase, according to Cook County real estate records. The building, 8424 W. 47th St. in Lyons, is along Interstate 55, about 12 miles southwest of the Loop.
United State Cold Storage, a refrigerated-warehouse operator with more than 30 facilities in 12 states, will lease more than 148,000 square feet in the building, according to Bridge. Steve Connolly and Larry Much, executive vice-presidents with Oakbrook Terrace-based NAI Hiffman, represented United States Cold Storage in the sale and will be Bridge’s leasing agents for the building.
Mr. Pricco says negotiations are under way with multiple tenants to fill most of the available space, declining to name them.
A spokesman for United States Cold Storage did not immediately return a phone call for comment.