Finance
Net Leasing
Jul 21, 2009
By: Adam Perrotta, Digital Editor
Like all commercial property players, industrial REIT ProLogis has had to deal with the challenges of the sagging economy and sluggish leasing market. Despite the tumultuous environment though, the firm is still getting deals done—including some very sizable transactions, like a 250,000-square-foot lease the firm recently inked with Roosevelt Paper Co. near Chicago. That deal was the largest splash made by ProLogis in the region during the second quarter, during which it racked up a total of nearly 600,000 square feet in leases.
The Roosevelt lease was one of eight Chicago-area deals for ProLogis in the second quarter. The paper firm will occupy space at Alsip Distribution Center, Building One, located in Chicago’s South Cook County submarket. Financial terms of the deal--the first between the two firms—were not disclosed, but the average asking rent for warehouse/distribution space in the submarket was $3.67 during the first quarter, according to real estate services firm Grubb & Ellis Co.
For ProLogis, the Chicago market has proven to be relatively attractive to tenants, due to its advantageous location and proximity to major transportation arteries and hubs. “We believe the features of the market will remains attractive to companies looking for distribution space,” noted ProLogis first vice president & market officer John Picchiotti. “Due to its central location in the Midwest, trucks leaving Chicago can reach one third of the country’s population within a day’s drive,” he noted.
While keeping active in the leasing market in Chicago and other markets where it owns property, ProLogis has also been actively selling off assets in an effort to reduce its debt load under a program enacted last fall. According to a report in the Denver Business Journal, the REIT had sold off most of the 14.2 million of North American properties it had marked for divestment in the second quarter. The report cited a $561 million in total sales revenue, as well as $200 million in net earnings to go toward paying down the firm’s debt, which stood at $9.3 billion at the end of the first quarter. The firm is looking to sell off another $96 million in assets during the second half of the year.
ProLogis will release its second-quarter 2009 financial results later this week.
By: Adam Perrotta, Digital Editor
Like all commercial property players, industrial REIT ProLogis has had to deal with the challenges of the sagging economy and sluggish leasing market. Despite the tumultuous environment though, the firm is still getting deals done—including some very sizable transactions, like a 250,000-square-foot lease the firm recently inked with Roosevelt Paper Co. near Chicago. That deal was the largest splash made by ProLogis in the region during the second quarter, during which it racked up a total of nearly 600,000 square feet in leases.
The Roosevelt lease was one of eight Chicago-area deals for ProLogis in the second quarter. The paper firm will occupy space at Alsip Distribution Center, Building One, located in Chicago’s South Cook County submarket. Financial terms of the deal--the first between the two firms—were not disclosed, but the average asking rent for warehouse/distribution space in the submarket was $3.67 during the first quarter, according to real estate services firm Grubb & Ellis Co.
For ProLogis, the Chicago market has proven to be relatively attractive to tenants, due to its advantageous location and proximity to major transportation arteries and hubs. “We believe the features of the market will remains attractive to companies looking for distribution space,” noted ProLogis first vice president & market officer John Picchiotti. “Due to its central location in the Midwest, trucks leaving Chicago can reach one third of the country’s population within a day’s drive,” he noted.
While keeping active in the leasing market in Chicago and other markets where it owns property, ProLogis has also been actively selling off assets in an effort to reduce its debt load under a program enacted last fall. According to a report in the Denver Business Journal, the REIT had sold off most of the 14.2 million of North American properties it had marked for divestment in the second quarter. The report cited a $561 million in total sales revenue, as well as $200 million in net earnings to go toward paying down the firm’s debt, which stood at $9.3 billion at the end of the first quarter. The firm is looking to sell off another $96 million in assets during the second half of the year.
ProLogis will release its second-quarter 2009 financial results later this week.
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