Industrial parts manufacturing giant W.W. Grainger said Tuesday it bought a million-square-foot distribution center 50 miles southwest of Chicago and will move logistics operations there by 2012.
The $6.9 billion company bought the site in Minooka, Ill., from logistics facilities developer AMB Property for an undisclosed sum.
The distribution center will replace a 750,000-square-foot facility in Niles, Ill., in the suburbs north of Chicago, where W.W. Grainger also operates a second, smaller warehouse. The company said it would employ about 400 people.
The sale appears to be the largest in the United States this year in a logistics real estate market that has been hit hard as companies have scaled back inventory and spending in the economic downturn.
But W.W. Grainger also managed to expand its net profit in the third quarter ending Sept. 30 even though sales have fallen at a double-digit rate this year. The Illinois-based company added $276 million in cash to its balance sheet in the first nine months of this year as it cut inventory holdings more than 15 percent, and it looks intent on fine-tuning its supply chain to push out goods more rapidly.
"Opening a new distribution center southwest of Chicago will allow us to deliver more products next-day to our Midwest customers," said Tommy Kersting, Grainger's distribution director in the region.
No sale price was released but earlier reports said the deal was valued at about $26.5 million, close to the $24 million assessed value of the property.