Michelin North America has paid $151 million for the Wilmington, Ill., distribution center it has leased since 2015, according to seller GFH Partners. The 2-million-square-foot building is one of Michelin’s two super regional distribution centers in the US.
The warehouse handles 35% of Michelin’s imported inventory and supplies dealers and automakers across the Midwest and West, Bisnow reported. The 91-acre site has access to Interstate 55 and the BNSF rail network. More than 400 people work there.
GFH and Silver Creek Development bought the property in 2021 for about $135 million, according to GFH. The partners added trailer parking and extended Michelin’s lease ahead of its November 2027 expiration. “There is no stronger endorsement of an asset’s quality than its tenant choosing to own it,” GFH Partners CEO Nael Mustafa said.
The purchase comes as warehouse capacity tightens. Prologis, the largest US warehouse owner, reported 95.1% average occupancy in the third quarter. CEO Dan Letter said customers were running lean on inventory and excess capacity across their networks had largely cleared, reported FreightWaves. Warehousing and storage prices have risen 52% since January 2020, according to the Bureau of Labor Statistics.
Chicago-area industrial vacancy held at 4.7% for a fourth straight quarter, according to Cushman & Wakefield.
