Currently, West Cook's vacancy rate is at 8.26% and is made up of 14 cities, with Franklin Park, Melrose Park, Schiller Park, and Northlake inventory combining to make up 79.91% of the submarkets total of 58,036,172 SF. The West Cook submarket is currently marketing 6.36 million SF of available space, 1.52 million SF more than the Central DuPage market at 4.84 million SF.
6b tax abatement
The 6b tax abatement is a Cook county program designed to give tax relief to industrial properties. This incentive lasts for 12 years and is tied to the property--not the property owner--meaning one can transfer this incentive if the building is sold, adding significant value to the transaction.
Typically, an industrial asset would be assessed at 25% of its market value, but the 6b lowers the assessment level down to:
- 10% of its market value for a period of 10 years
- 15% of market value in year 11
- and 20% in year 12
An easier way to think about this is with a 6b in place you save 60% off of your property taxes from years 1-10, 40% off your taxes in year 11, and 20% off of your taxes in year 12. What this means for you is that over that course of 12 years you save 55% off your property taxes.
Over the past five years, Central DuPage and West Cook were both susceptible to fluctuations in the market. It appears that both markets are comparable in sustaining a stable average per square foot sale price.
In this time frame, average Central DuPage pricing was between $42.22 PSF and $75.10 PSF, a spread of $32.88 PSF. In West Cook, average pricing was between $21.59 PSF and $52.40 PSF, a difference of $30.81 PSF.
Note the two scenarios for the West Cook buildings if the building was granted a 6B tax abatement vs. no tax abatement. Based on the following scenarios, without negotiating the asking price, a manufacturer with a 6B would end up paying around $3.69-$4.14 PSF annually for their mortgage and tax payments. Without receiving the 6B they would be around $5.36-$6.09 PSF, compared to $5.45-$6.66 PSF in Central DuPage. This shows the significance a 6B can play in the decision-making process when selecting a building and county for your operation.