Manufacturers Snap Up Small-Cap/Small-Town Midwest Industrial Buildings

November 21, 2012

One can make a pretty good case that a big factor in the Presidential election was the generally solid rebound in the domestic auto sector - and more particularly its effect within the long-struggling Midwest "rust belt" manufacturing region. Given the contrasting Obama and Romney positions when the industry's very existence teetered amid the depth of the Great Recession, perhaps it's no great surprise that the latter lost even one of his titular home states: Michigan.

Even during a couple of run-up months before Election Day, there was ample evidence of renewal in the manufacturing sector with upgrading and expansions of small-cap industrial properties in secondary and tertiary metros surrounding Lake Michigan.

The activity also reflects consistently positive (albeit weak) progress in private-sector employment - with manufacturing continuing to play a key role.

Indeed, the Federal Reserve's latest Beige Book economic update for the August/September period points to notable gains in manufacturing not just related to the auto and transportation sectors, but also to energy and even construction as well.

And for the Chicago Fed District specifically, manufacturing remains a key source of economic strength. As noted below, an interesting variety of growing tech-minded manufacturing operations are not only absorbing vacated small-cap facilities in seemingly out-of-the-way places, supply-and-demand fundamentals are even prompting some custom development activity.

We'll start our round-up half-way between Milwaukee and Chicago near the lakeshore in Kenosha, Wis., where leading centrifuge maker Centrisys Corp. just bought a 19,220-square-foot building just across 58th Place from its headquarters facility. Centrisys makes sophisticated centrifuges that act as drying mechanisms for sludge-like materials that are used in high-tech systems that generate energy from waste at modern treatment plants.

It's a field that's already predictably thriving in green-minded Europe - and almost certainly has better days ahead in the U.S. In fact Centrisys will share the new structure with its partner SH&E Gruppe, a German manufacturer of those waste-to-energy conversion systems - which is positioning itself for considerable growth domestically.

Centrisys bought the property, in a semi-suburban business park adjacent to the Kenosha Regional Airport, from the regional Klein-Dickert Co. auto glass and commercial/residential painting company. Cassidy Turley Barry brokered the sale, consideration for which is being kept confidential.

Not far to the south in Libertyville, Ill., laser-equipped, metal fabricator Laser Precision is more than doubling its roughly 58,000-square-foot Commerce Drive headquarters complex with a 70,500-foot addition.

The new state-of-the-art steel-processing facility will help Laser Precision continue growing its sophisticated production activities serving makers of medical, agricultural and transportation-related equipment, along with various custom activities - and the automotive aftermarket.

Laser Precision engaged locally based Principle Construction Corp. to erect the new facility on the company's excess land in an industrial park near the Lake County Fairgrounds.

Well northwest of Milwaukee in the small (but industrial-heavy) town of Jackson, Wis., owners of another expanding laser-equipped metal fabrication firm just got what appears to be a pretty decent deal on a long-vacant, approximately 50,000-square-foot REO property acquired from the former lender for $1.5 million ($30 a foot).

The Laser Shop, a 16-year-old fabricator based in nearby Germantown, bought the former Edward Hines Lumber Co. building at 17150 Industrial Dr. from WaterStone Bank. The acquisition represents an expansion for a company with a wide-varied clientele.

NAI MLG Commercial and Dickman Co./CORFAC International brokered the sale of the property, which reportedly had been listed for $2.5 million.

Across the lake in south-central Michigan, the buyer and seller of a roughly 20,000-square-foot manufacturing facility in the small town of Dexter are both in expansion modes. The buyer is Moore Controls, which makes automated conveyor and related control systems - and is expanding from a smaller building on the same industrialized street: Bishop Circle.

The seller is Michigan Automatic Turning, which provides machining and spline rolling services - and whose multi-site operations are being consolidated into a large facility near its airport-adjacent headquarters in the smallish city of Howell to the north.

Signature Associates, the regional member of the Cushman & Wakefield Alliance, brokered the sale of the property in Dexter, which is several miles northwest of Ann Arbor. The price was not disclosed.

Lastly it's encouraging to see that a regional supplier to the building industry (and others) is expanding to the 30,883-square-foot industrial building next door to its existing site in Muskegon Heights, along Lake Michigan 30-some miles northwest of Grand Rapids. High Grade Concrete Products Co., which offers ready-mix concrete, sand and gravel, acquired the property along Sherman Boulevard from Westblock LLC in another Signature-brokered transaction.

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