This is Industrial Drive in Elmhurst and this is a street where we have owned, I think it’s 5 buildings over the past 15 years and we still own 3 on this street, and we also own other property nearby.
Let me first give you the introduction. We’re at the corner, right here, of York Road, which is a main road that goes right to the airport to the north, and the intersection with Industrial Drive.
And, Industrial Drive, here, is a thoroughfare that connects another street to York Road called Grand Avenue. So, if you look to the right here at this Mariano’s sign, this used to be a Ford dealership. It was a Ford dealer that had been there for many years and it was a dilapidated looking building and the Ford dealer moved and the property was sold.
And Mariano’s, which is a very high-end grocery store, replaced the Ford dealer. When you have a main street like this, like York Road, usually what you have are fast food restaurants and stores, grocery stores and car dealerships. That’s why this corner has the Mariano’s. Everybody in the Chicago area knows the Mariano’s, at the corner of Industrial and York.
Now, if you go straight up on Industrial there is a self-storage place on the left and opposite is the Comcast building, which is next to the Mariano’s. We own this building. It’s 110,000 square feet. And if you took a look at it, from a bird’s eye view, you would see that it’s nine and a half acres with a 650 car parking lot. It was originally the Keebler Cookie headquarters. Built in the 1980s by two guys by the name of Beal and Gottlieb. They got lucky and Keebler came in and bought it from them when it was a spec building, before anyone had occupied it. Keebler built it out. They had their little elves, in a hollow tree at the front entrance. It was kind of a cute deal. And then Keebler got bought out by Kellogg’s and they put this building on the market and in 2004, I bought this for $6 million and ended up getting lucky, finding Comcast who needed a call center in a warehouse, and we made a 15 year lease with them and ended up making many improvements to the building. We spent $11 million to improve it for them. Comcast is committed for another year and a half in their 15 year lease and we are in the market to find another tenant.
Now I want to show you, on the left, what is over there. You see those multi-storey buildings? The buildings on the left are owned by a fellow named Al Copeland who lives in Hinsdale. It’s funny. I met him at a funeral, and we were talking about real estate and he said, I own property on Industrial Drive, and I said, Are you Al Copeland? And he said, I am. I said, I’ve seen your sign many times because we own properties all around you. We became friends. He’s in his mid 90s. Terrific guy.
Keep going up the street, a little bit. Now, look a little bit to the right. That building is right across the street from our Comcast building. If you look to the right, there’s a street there called Larch Avenue. Go a little more. That’s Larch and that’s the side of our Comcast building you’re looking at, and on the left here, is the distributor for Chicago, for Red Bull, the drink. If you want energy, you stop in. If you open their dock, you can walk in and you see tons of cans of Red Bull. That’s what this guy does. I’ve been trying to buy this building for years and he just doesn’t want to sell. I think he needs more space, but apparently he can jam it all in there.
Now, keep going up the street. On the left is a medical association. We tried to buy that building as well and couldn’t buy it. This is where they used to arrange transplants. If you needed a transplant, this was the facility, where it was like a clearinghouse for the country for that.
Keep going up the street. Right there on the left, that building right there, that’s another Comcast building. That’s the brains of their Chicago operation. It’s so technical inside, they can never move. They have all kinds of switches and all kinds of equipment.
Keep going up the street, a little more. On the left, right there, that is a building we own. It’s an 18,000 square foot building. We bought that from a major developer in Chicago. I don’t know how he ended up owning it. His name was Bob Lanphere and we bought the building. And we bought it because, if you look between this building and the one to the right, you can see a car parked on the grass.
We also own this building to the right, which is an awning manufacturing company. And the reason we bought both buildings is because if you look at the land in between, there’s not enough room, if you own one or the other, to park cars. But if you own both, you can park cars. I don’t know when this was taken, but we’ve paved that area where the cars parked and now there’s a big parking lot between the two and we own both.
The dog trainer on the left, is “For Your K9” and on the right, it’s called Thatcher Oaks Awning, which is owned by a guy by the name of Jim Patten. He’s got a daughter who is a Broadway actress and singer. We get to know these people really well.
When they are our tenants, we get to know them personally. And both, Nancy, who owns the dog training operation, and Jim and his wife, have become good friends of ours, as well as tenants.
So now, turn to the right and look right across the street. So that’s an 11,000 square foot building at 717 Industrial. And if you look to the left, the dark brick building. This is where I walked up the sidewalk to that front door right there, and I was showing one of my young mentees how to cold call, door to door.
And I walked in the door and I said to the receptionist, I need to talk to whoever it would be that could tell me if you would consider selling your building. And she looked at me, totally straight faced and said, We’re never moving. And I said, How do you know that? And she said, Because I live about six blocks from here and if we moved, I’d have to drive a long way to get to work compared to now. And I could see that there was a man in an office right behind her. The door was open and he was sort of staring at me and I thought he might be listening so I said loudly enough, Well, if anybody here is in charge of selling the building and they want to talk to me, here’s my card.
And I dropped off my card and then I walked out the door with the young man that I was training and as I was walking out, this guy comes chasing after me, on the sidewalk where the sign is there, where it says Nelson and he says, Please stop, stop! My receptionist doesn’t know what she’s talking about. We are looking to sell these buildings. We have not put them on the market yet. So, I said, Both buildings? and he said, Yeah. You can’t see it now, but between these two buildings, there used to be a hallway that connected them. And so, we went to Denny’s, right at that moment and had coffee. I made him an offer on the spot, and I bought both buildings 30 days later.
Now if you turn left, you’ll see the front of this one. We flipped this one, the dark colored brick building. We flipped this building within 90 days. We bought it for $1,200,000, we sold it for a $1,500,000, but we kept the one on the right and leased it.
Now let’s go back to the street and we’ll keep going down the street a bit. On the left is a multi-tenant building, also built by Jerry Gottlieb and Joe Beal, who built the Comcast building. This one was built in the 1960s and it’s currently owned by a friend of ours. It’s called VIP, which is an industrial property manager that does exactly what we do but, we have mostly single-tenant buildings and they have mostly multi-tenant buildings, like this one. This has interior docks and 16 foot clear ceilings and the unit sizes are between three and five thousand square feet. And Brian, who owns it and runs it, has it mostly leased up. Keep on going straight up the street, a little bit more.
Ok, good. You’re coming to a cross street, and at this cross street, turn to the right. This building over here is owned by a fellow by the name of Rossie and it’s a multi-tenant building.
And then, if you were to go up the street to the right, and you turned to the right, that’s Larch, which is another industrial street where we own a building. Keep on going straight ahead and make a right when you get to Larch. That’s the cul de sac. If you look to the left, the building on the corner was owned by a trucking guy who recently sold it. Sold the building for $100 a square foot.
If you then turn to the right, go a little more to the right, there’s Brico and then to the right of Brico, go one more building over, that building is actually, right across the street. I’ve been trying to buy this one. I stop in about three times a year. The guy won’t entertain a sale. But if you go across the street, to the right. A little bit more to the right. That one’s called Chicago Communications. We bought that one about 15 years ago and then sold it to the tenant.
And then to the left, is a building that we bought in the early 2000s, 752 Larch and we bought it from a guy who is in the baby crib build business. It was leased then to a wire company and now the wire company moved out and we leased it to a company that’s in the electric service business. They work on very large electric projects for Commonwealth Edison, which is the electric provider in our area.
Then go left. Go one building up. Go a little more left. So this building here is uncle Felix. He’s not my uncle Felix. He’s the uncle Felix of a broker that used to work for us, at our firm. When we sold the firm, he left and went to Cushman & Wakefield. And uncle Felix makes bread. He’s one of the biggest bread makers for restaurants in the Chicago area.
He bought it from a company that had fixed it up to be a food manufacturing building. It was a bakery called Red Hen and Red Hen went out of business. I don’t know why they did, but when it went out of business, uncle Felix was delighted because it was set up for his operations. He didn’t have to do too much to become a bread baker here on Larch Avenue.
Go back to the right, across the street. So, the building, just right here. We tried to buy this because it was next door to us. S & S Automotive was owned by a family and we got to know them. But we did such a great job of negotiating and trying to buy this building. We wanted it very badly. We ended up agreeing to a price and then, they went dark on us. They wouldn’t return our calls. So, it turns out, they received another offer before they had committed to our contract.
If you go back on the street and go down the street, two more buildings. Well, you can see it from here. See the building with the two-storey office. That’s the Chicago Water and Restoration Company. Turns out, they’d been growing so fast that they needed another building and they turned out to be the one that outbid us on the building that I just showed you before. We thought we were buying it. Next thing we know, Chicago Water buys it for $500,000 more than we had agreed to buy it for. So, I can’t blame the family for selling it for $500,000 more. Just, they got lucky and we got unlucky.
Let’s go back down this street, the other way. I’m going to show you the other side of my Comcast building. Go straight ahead. There you go. This is a multi-tenant building. We tried to buy it, never been successful. I don’t like red buildings, so I’m not so upset that we didn’t get this one. I have no idea why they painted it red. I don’t like the look.
But, now turn to the left. That is my Comcast building and you can see the loading docks. You can see the size of the parking lot. This is the most unusual thing in Elmhurst. It’s a building that has a parking lot that’s literally seven acres of parking. And Comcast, which is Xfinity, in this location, had 650 people working in the call center, plus all of their Xfinity vans.
The reason they leased this building is they couldn’t find anything in the Chicago area that even came close to matching our parking lot. And the reason they had such a big parking lot is, when Keebler owned it, they had a lot of people working there and they paved this big lot so that their employees would have enough parking. It’s the main reason that we bought it.
And you can see, straight ahead, as you’re looking at a building across. That’s the Mariano’s grocery store and then go a little bit more left, so you can see white buildings behind the truck? I’m trying to buy that right now. It’s a United Van Lines moving company and we absolutely want to buy it but they think they’ve got a better value than what we’re willing to pay, in their future, because it’s on York Road, which is the main road. The agents are these two guys, Justin and Joe, who work for Transwestern, which is interesting because I hired Justin out of college and we hired Joe years later. And they are a couple of the mentees that worked for us. And when we sold our brokerage business to Transwestern, they stayed there.
We had worked with them as our agents on a property that we own and we have done leases with them where they have brought us deals. The brokerage community is so tight. We all know each other very well. I can tell who the Listing Agent is for almost every property. And the ones we own, everybody knows we own them. We have a reputation in town for being a widespread property owner throughout the Chicago market and all the brokers know us and, it’s just a great market for building and maintaining relationships long term.
Now if you go back to where we were before, by the bread guy and by MZI. Go left and take the street, straight ahead, all the way to the end, then make a left at the end of the street. Go past Chicago Graphics or Chicago Communications. Go straight. Now you’re going to make a right turn here. So, this is the Rossie building on the left. This is a truck facility. It’s a truck facility. We’ve been very unsuccessful in getting them to have any discussions about selling it, but we’ve tried.
Go back to the right and now go straight ahead. Ok. So the building on the right is Coin Mechanisms. They make a product that goes into slot machines and vending machines. The fact that it’s called Coin Mechanisms – very descriptive of what they do. This was one of my first cold calls in the business, when I was in my 20s. I stopped in and I met a woman by the name of Arlene Pierz, who was the owner of the company because she and her husband had started it and he passed away. And I became really close friends with Arlene and then her son, Stan and the daughter Rhoda, who unfortunately also passed away last year. But I remain close with the son and when they actually moved out of this building for a short time and I was in the brokerage business, I leased it for them. It’s a 20,000 square foot building. It’s a little short on parking. That’s the problem with it.
Now go left to the other side of the street. You see that giant globe? This is Abe. This is Abe, the window guy. Abe has a company that installs windows and skyscrapers. That’s what he does. He manufactures these giant window assemblies inside this building. We tried to buy it. Another situation where the seller was talking to us but when Abe came in, he needed it for his business and he decided that he had to have it so, he paid about a million dollars more than we were willing to pay and we had to walk away from this one and felt badly. But Abe’s become a friend of ours also. It’s nice to have neighbors who we know. I’ve talked to him about doing windows in our buildings, but our buildings are too small for him. He likes the big ones. He likes a multimillion dollar job.
So, if you go back onto the street. The building on the right up here, the one with the white top. This is owned by another industrial real estate group that we’re friendly with. They’re based in Northbrook and this building is about 40,000 square feet. It’s had two tenants since I’ve been in the business. There’s no way we’re ever going to be able to buy that one. Yeah, it’s a nice building, but we’re not going to get it. It’s not going to happen.
Keep going straight up. You go up to the next building on the right and it’s an automotive body shop repair. ABRA, it’s called. We tried to buy this one, unsuccessfully. It’s very hard to compete with a user. When a user wants to buy a building, they get it, because they’ll pay more. When we buy it, we have to be more conscious of price. So, I’d say at least half the time we’re competing with the user before we’re able to buy the building.
Go back to the street. Go up a little bit more. The building on the left, Mostardi Platt. They rehabbed this building. They’re in the environmental testing business. They did a beautiful job. I love it when someone on a street, where we own a lot of properties, fixes it up. It just increases the curb appeal of the street. It brings it to a more modern look. The windows, you can see how nice they look and the front entrance. It didn’t look like that in the 1980s. It wasn’t quite that nice. But the interior is beautiful. They redid all the windows and all the doors. They did some landscaping.
Go back to the street one more time and go up a couple of buildings and I’ll show you some more fun than we’ve had. We’ve been trying to buy the building on the left here. This particular seller is just an individual who refuses to sell.
The truck lot on the left; it’s a truck repair facility. It’s such a specialized use. It doesn’t have truck docks. It only has drive-in doors. It wasn’t right for us and when it went on the market, it sold to this trucking company. Usually a building that’s got a specialized use stays that use long term and the next occupant is going to use it the same way the prior one did. Just like the bakery. Just like uncle Felix’s building, used to be a bakery and it’s staying a bakery. When someone spends a lot of money to fix something up, it’s very easy for a similar business to move in because they save all the build-out costs that they would have had to incur if it was just a regular box.
If you go back to the left and go up the street a little bit more. This is a building, on the left, it’s funny, the owner of this building is in the securities business. It’s got a very fancy look because, he’s got LaSalle St. Securities in the front and in the back is a manufacturing business. This could be a downtown operation. It could be on LaSalle St., which is why it’s funny it’s called LaSalle St. Securities.
He’s got people in there who are money managers in the middle of an industrial park. And I suppose his rent is low and well, it’s not rent. He owns the building. So, he occupies it for very little and he is subsidized by the manufacturing company in the back.
And, the reason we figured this out is because, again, a young broker and I, from our office years ago, went and knocked on the door and were surprised to learn that LaSalle is only in the front. We took a walk around the back and, kind of, snuck-in the open door of the truck dock to see what they were doing back there. We were very surprised to see that the front is a completely different use and a different kind of business.
Go back to the street one more time and keep going straight up. Over here, on the left. If you look at that building. That is a multi-tenant complex, owned by the Rothbart family. They are owners of many buildings in the Chicago area and in fact, some of our investors are co-investors with them. So, we have a connection. And in fact, they also do construction and, at one time, we asked them to put an addition on one of our buildings, which they did. There’s two brothers and they’re both fantastic guys, Gary and Mike. Mike was in the construction side and Gary was in the property management side. This building is divided into spaces of three, five, seven, ten thousand square feet.
I call Gary all the time and I say, You ready to sell that building on Industrial Drive? And his answer is: Still no, he says, But let’s go get a cheeseburger and a beer. He’s a golfer. We haven’t played together, but he’s been in groups behind me and in front of me and we have a really nice rapport. I wish they would sell us this building. It’s right up our alley. A very attractive, great tenants.
Make a right. Go back to the street. So now we’re almost at Grand Avenue and this is where the car dealers are. So, again, back to the fact that when you’re on a main street, it’s retail. So, this is a typical industrial area. Main Street retail, go right behind to the next building and it’s industrial.
That’s the tour of Industrial Drive and the areas around it in Elmhurst. You can see why I like it. There’s virtually nothing available for sale in this park. When something comes on the market, it usually sells very quickly, and when something comes on for lease, it usually leases quickly. We very rarely had vacancies when we’ve had turnover.