Deal Size
$300.0M
Cap Rate
Est. 4.20%
$/SF
$1293
Size
232K SF
Occupancy
0%
The investment involves acquiring two vacant industrial buildings in Elk Grove Village and Lombard, IL, with a combined size of 232,077 SF and a deal amount of $300M. The occupancy rate is 0%, and the cap rate is not disclosed, making it difficult to assess the risk-adjusted return. The lack of disclosed financial metrics such as cap rate and WALT, combined with the full vacancy, suggests a high-risk profile without clear compensating upside potential. Given these uncertainties, the investment does not align with typical institutional-grade criteria for risk-adjusted returns.
Matterhorn Venture Partners and TPG Angelo Gordon are pursuing a value-add strategy, targeting vacant industrial assets for repositioning and lease-up in the Chicago market. This acquisition aligns with their broader strategy to deploy $300 million in equity across industrial acquisitions.
This acquisition by institutional buyers indicates continued interest in the Chicago industrial market despite the full vacancy of the properties. It suggests confidence in the market's long-term fundamentals and potential for lease-up, but also highlights the challenges of acquiring vacant assets without disclosed financial metrics.
Avison Young / Transwestern
TPG Angelo Gordon U.S. Real Estate
The Chicago metro area, including Elk Grove Village and Lombard, is a primary market with moderate population growth and stable income trends. The area benefits from a diverse economy and a central location in the Midwest, which supports industrial demand.
The submarket includes several industrial properties with established tenants. Recent transactions in the area have shown competitive leasing activity, but the full vacancy of the subject properties presents a significant challenge.
There is no specific data on new developments in the immediate submarket from the sources. However, the Chicago industrial market generally experiences ongoing development due to strong logistics demand.
The Chicago industrial market has seen steady rent growth due to strong logistics demand. However, the full vacancy of these properties suggests that achieving market rents may require significant leasing efforts.
The properties are fully vacant, indicating potential for lease-up as a value-add strategy. However, the lack of tenant commitments increases the risk and uncertainty of achieving projected returns.
Full vacancy of both properties
HighEngage experienced leasing agents and offer competitive lease terms to attract tenants quickly. Consider temporary incentives to reduce initial vacancy risk.
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