900 Business Center Drive – Mount Prospect

Investment Overview:

900 Business Center drive is a 43,282 square foot two-tenant industrial property located in Kensington Business Center.The property’s largest tenant, BladeRoom, LLC, occupied approximately 70%of the 43,538 square feet and this building served as BladeRoom’s USA headquarters for their impressive operationThe property also had a new tenant, Laurens Restoration, which represented an expansion in to the market for this seasoned disaster restoration firm. This opportunity allowed ownership to purchase a fully-leased, well-maintained industrial building in a very strong industrial market at a price significantly below replacement cost ($47 psf), at an above-market cap rate for industrial (8.8-cap), with tenants that had below-market rents ($4.45 psf).BladeRoom bought out of their lease late in 2017to relocate to Nashville. Towards the end of this process, Laurens Restoration became delinquent and was eventually terminated from their lease.

Investment Summary:

Ownership was successful in reletting to two new tenants –Dynamic Rubber in the larger section and CED, a national electronics distributor, in the smaller section. We were then approached by an international industrial fund out of Israel who provided an unsolicited offer to purchase the property. Our original thesis held firm (low entry basis, low rents) and we were successful in achieving outsized returns to our investors (13%+ IRR)and a 1.9 equity multiple.