Deal of the Week: Pewaukee property part of 8-building portfolio that sold for more than $100 million

Milwaukee-based Zilber Ltd.‘s Towne Investments division and Interstate Partners LLC, which have been involved in numerous joint ventures, recently completed the sale of a 8-building portfolio to San Francisco-based Stockbridge Real Estate.

The portfolio that was sold includes seven buildings in two adjacent industrial parks in Elgin, Ill., and a building in the RidgeView Corporate Park in Pewaukee. The 120,000-square-foot Ridgeview property is the home of A.L. Schutzman Co., a nut and snack processor. The Elgin properties are in the NorthWest Corporate Park and the NorthWest Business Park.

Combined, the industrial properties in the sale span more than 2 million square feet. Sources said the value of the transaction was more than $100 million.

The deal is believed to be the largest industrial property portfolio sale in the Midwest since 2008.

Jim Carpenter and Ken Szady of Cushman & Wakefield’s Capital Markets Group represented Towne Investments and Interstate Partners and Cushman & Wakefield Sonnenblick Goldman represented Stockbridge Real Estate in brokering the sale.

“We are extremely pleased. The sale of a property is the final stage in the cycle of any successful real estate project and this transaction provides the opportunity to expand and enhance both our portfolios with new product,” Francis Brzezinski, chief executive officer of Interstate Partners LLC, and John Kersey, executive vice president of Zilber Ltd., said in a joint statement. “This is another indication of the strong economic climate for quality industrial properties in good locations, particularly in the Midwest. Our ventures have proven to be extremely rewarding for both parties and we will continue to look for opportunities to work together on real estate projects.”

Industrial investment volume for the Chicago market showed improvement during the second half of 2010, following record-low volume in 2009. The current pipeline of transactions closed or in the market and expected to close totals more than $500 million, putting the market on pace to return to normal industrial sales volumes in 2011, according to Cushman & Wakefield.

“As the market leader, we’re very pleased to have completed the first of many large transactions we will see in 2011,” Carpenter said. “Going forward, it’s our view that the investment market will now broaden to include Class B assets as well as properties with lease rollover and vacancy as investors become more comfortable underwriting risk and seek higher yields. You’ll see offerings like that from us in the not too distant future. Get ready.”

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