Industrial Cap Rates - Chicago Suburb

[Jim Froehlich]

I am considering an industrial property (Class B) in Carol Stream, IL, which would yield a short-term absolute NNN, but give at least 6-months of vacant-while-receiving rent to get new tenants in and property also has great room for expansion. If anyone has experience in this geography, I would like to know your thoughts on the area, the cap rates, and future trends (good or bad) - Thanks!

[Brian Ploszay]

The area - Carol Stream is in DuPage County.  It is solid real estate.  Overall, industrial real estate is the bright spot for commercial real estate.  Future trends - it is hard to build new competitive buildings in the area, so the supply can't grow too much.  As far as cap rates, go onto CoStar and pull comps for the last six months.  A lot of the comps have to be interpreted, because some of the properties are user space.  So look at sales per square foot prices, as well as cap rates.