2011 Quarterly Market Trends

The Grubb & Ellis Quarterly Market Trends are now available for the first quarter of 2011. The year started off well with a drop in the overall vacancy rate for the Chicago metro area to 11.3%, the lowest we have seen since 2009.

In the I-55 corridor submarket the vacancy has plunged 270 basis points from 11.9% to 9.2 %, the sharpest decrease in vacancy in a single quarter since the 4th quarter of 2001. The 9.2 vacancy rate is the lowest the I-55 corridor has seen since the 4th quarter of 2007.

Historically, the vacancy rate for I-55 corridor has been higher than the overall vacancy rate for the Chicago Metro area due to the large amount of speculative construction of large distribution centers. Since the recession hit, speculative development has been halted in the I-55 corridor but the demand for quality distribution centers strategically located near expressways, intermodal centers in the I-55 corridor has remained strong.

Chicago Industrial Real Estate 3rd Quarter Trends

Third quarter trends our out for the Chicago industrial market and the overall vacancy rate in Chicago dropped 20 basis point to 11.9% the lowest vacancy rate that we have seen for the entire Chicago industrial market since the 4th quarter of 2009.

The I-55 corridor vacancy rate dropped to 11.3% marking the the second consecutive quarter of declining vacancy in this submarket and the lowest vacancy rate since the 4th quarter of 2007 when the vacancy was at 9.7%. I think we will continue to see a decline in of vacancy rates as owners/investors continue to lease up property while holding off on any speculative development at this time.

To view Grubb & Ellis industrial market trends for the Chicagoland area and for the I-55 corridor, please visit www.industrialrealsetateinfo.com

SBA 504 Small Business Loans for commercial real estate

Recently the Small Business Jobs Bill was passed resulting in changes to the Small Business Administration loans. These loans are very attractive allowing financing up to 90%. Certain procedures have to be followed to qualify for these loans but if you work with a qualified SBA loan professional, this program can be very attractive to companies looking to purchase industrial real estate. Here are some highlights of the program.

**SBA 504 Program Update resulting from the recently passed Small Business Jobs Bill**

Allocates $505 Million for the continuation of SBA Fee reductions under the American Recovery and Reinvestment Act.

Maximum SBA 504 Loan Amounts – The loan maximum on the SBA portion of financing
is permanently increased to $5 Million ($5.5 Million for small manufacturers and borrowers
meeting certain Energy Efficiency Public Policy goals). This means that SBA lenders
participate in projects up to $12,500,000 under the 50/40/10 structure.

Maximum Size limit increase – Maximum Corporate tangible Net Worth increases to
$15MM and two-year average net income after taxes increases to $5MM. This change will allow
the SBA 504 loan program to become a very viable option for Middle Market companies.

For more information on SBA please visit my real estate news page at http://www.industrialrealestateinfo.com/

Chicago Industrial Real Estate Market Update

It seems like market activity is improving. In the second quarter of this year we saw a leveling out of the vacancy rate for the entire Chicago industrial real estate market and we experienced a drop of 2.7% in the vacancy rate in the I-55 corridor.

I have seen an increase in activity on my listings and word from our capital group is that financing is starting to free up . Hopefully that will translate into more qualified buyers of industrial property. The overall tone that I hear from speaking with business leaders/owners is that they are cautiously optimistic. With regards to leasing, companies are more willing commit to longer terms versus a year ago when the average industrial lease renewal was one year and new industrial leases were averaging 2-3 years.

The Grubb & Ellis Chicago Industrial Market Trends will be out soon for the third quarter. You can always see current and past market reports on my real estate news page at http://www.industrialrealestateinfo.com/.

FASB's Changes For Lease Accounting

Here are two great articles written by Grubb & Ellis Corporate Finance group regarding FASB’s impact on commercial real estate leases. The proposed accounting changes would recognize leasing as a form of financing, eliminating operating leases, and placing all leased assets on the lessees’ balance sheets. You can read the two articles by visiting my industrial real estate news page located here.

M & E Cold Storage Sells Bolingbrook Facility to Supreme Lobster

Grubb & Ellis is pleased to have assisted M & E Cold Storage in the sale of the facility located at 279 Marquette Street, Bolingbrook, IL. Supreme Lobster purchased the 101,088 sf state-of- the-art freezer/cooler building which features, 35’ceiling height, one drive-in-door, and 11 exterior docks. Jim Cummings, Grubb & Ellis Company represented the seller, M & E Cold Storage.

Undisclosed Tenant to Lease 250,000 sf in Aurora

Jim Cummings, Grubb & Ellis Company, represented an undisclosed tenant in the lease of 250,000 sf, at the property located at 901 Biltner Rd., Aurora, owned by Liberty Property Trust.