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US Foodservice Takes Steps for Aurora Warehouse

CHICAGO (July 28, 2010 - Crain's)—Distribution giant U.S. Foodservice Inc. has purchased almost 50 acres in Aurora, a site big enough for a warehouse of about 1 million square feet, larger than any industrial building developed locally since 2008.

Rosemont-based U.S. Foodservice, the biggest privately held company based in the Chicago area, paid $8.24 million last month for the land, according to property records filed with the DuPage County Recorder.

The land is in the 258-acre Butterfield East park, near the intersection of Interstate 88 and State Route 59, owned by Indianapolis-based Duke Realty Corp. Steve Schnur, a senior vice-president in Duke's Rosemont office, declines to comment.

In an e-mail, a spokeswoman for U.S. Foodservice says only, "Chicago is a great market and we are keeping our options open for the future."

U.S. Foodservice paid about $165,500 an acre for the land. Duke bought the 258-acre parcel in 2006 for $39.6 million, or about $153,000 an acre.

There seems to be a feeling that the time to get good deals is running short, says Don Schoenheider, vice-president and city manager of the local region for Malvern, Pa.-based Liberty Property Trust.

"I think the sense, generally, is that the market has bottomed," says Mr. Schoenheider, whose company has land and buildings available in the Aurora area and says activity has improved in the past six months.

The intended use for the land U.S. Foodservice bought is "distribution center," according to a public record. The document does not provide any details about how big such a facility might be or when it would be built.

U.S. Foodservice could construct a building of about 1 million square feet on the parcel. That would be the biggest new local industrial project since CenterPoint Properties built a facility of just under 1.2 million square feet on 61.3 acres in 2008 at the CenterPoint Intermodal Center in Elwood, according to data from Colliers International's research department.

U.S. Foodservice also has an option expiring in 2010 to buy an additional adjacent 12.3 acres at Butterfield East, according to a document filed with the county.

The only building currently in the Butterfield East park is a 551,200-square-foot facility on a 25-acre site.

U.S. Foodservice has distribution facilities in west suburban Bensenville and in Streator, about 100 miles southwest of Chicago, according to the company's Web site. The company has more than 60 distribution facilities in the country, according to a fact sheet on the site.

Colliers (formerly Colliers Bennett & Kahnweiler Inc.) brokered the sale to U.S. Foodservice. An executive referred a question for comment to Duke.

U.S. Foodservice distributes food and other products to more than 250,000 customers, such as restaurants, hotels and schools, according to the fact sheet. The company had almost $19 billion in revenue last year, ranking it first on the Crain's List published in April of the area's biggest privately held companies.

U.S. Foodservice is owned by private-equity firms Kohlberg Kravis Roberts & Co. and Clayton Dubilier & Rice Inc., which bought it in 2007 from Royal Ahold N.V. for $7.1 billion.

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