EXHIBIT 10.5
                            INDUSTRIAL BUILDING LEASE

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       TERM OF LEASE
 Beginning          Ending
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 11/10/99        11/10/2009

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MONTHLY RENT    DATE OF LEASE                   LOCATION OF PREMISES
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                                               22222 North Pepper Road
                                             Barrington, Illinois 60010
$17,403.65        11/10/99              [See description of Leased Premises
                                            on Exhibit A attached hereto
                                               and made a part hereof]

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                                    PURPOSE
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      General office and warehouse use.

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           LESSEE                                  LESSOR

NAME       CTI Industries Corporation   NAME       Pepper Road, Inc.

ADDRESS    22160 North Pepper Road      ADDRESS    401 S. LaSalle St., Ste. 1302

CITY       Barrington, Illinois 60010   CITY       Chicago, Illinois 60605

In consideration of the mutual covenants and agreements herein stated, Lessor
hereby leases to Lessee and Lessee hereby leases from Lessor solely for the
above purpose the premises designated above (the "Premises"), together with the
appurtenances thereto, for the above Term.

                         LEASE COVENANTS AND AGREEMENTS

1.    RENT. Lessee shall pay Lessor or Lessor's agent as rent for the Premises
      the sum stated above, monthly in advance, until termination of this Lease,
      at Lessor's address stated above or such other address as Lessor may
      designate in writing.

2.    UTILITY CHARGES. Lessee will pay, in addition to the specified rent above,
      all water, telephone, gas, electric light and power bills taxed, levied or
      charged on the Premises, for and during the term of this Lease. In case
      said bills for water, rent, gas, electric light and power shall not be
      paid by Lessee when due, Lessor shall have the right to pay the same, and
      any amounts so paid, together with any sums paid by Lessor to keep the
      Premises in a clean and healthy condition, are declared to be additional
      rent and shall be payable by Lessee with the next installment of rent due
      thereafter.

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3.    PAYMENT BY LESSEE. In addition to the rent to be paid by Lessee for the
      Premises, Lessee shall pay as additional rent for the Premises, all real
      estate taxes, special assessment taxes, sewer charges, water rates and all
      other impositions, ordinary and extraordinary, of every kind and nature
      whatsoever, which are billed to the Premises or for any improvements made
      or placed on the Premises by Lessee, which Lessor shall become obligated
      to pay during the term of this Lease ("Impositions").

4.    INTEREST ON LATE PAYMENTS. Each and every installment of rent, and each
      and every payment of other charges under this Lease which shall not be
      paid within ten (10) days of the date due, shall bear interest at the
      lower of either the highest rate permitted by law or twenty percent (20%)
      per annum from the date when the same is payable under the terms of this
      Lease until the same shall be paid.

5.    RULES AND REGULATIONS. Lessee shall observe and comply with all reasonable
      rules and regulations as may be required by Lessor for the necessary,
      proper and orderly care of the Premises.

6.    ASSIGNMENT; SUBLETTING. Lessee shall not assign this Lease or permit by
      any act or default the transfer of any of Lessee's interest under this
      Lease by operation of law, nor shall Lessee offer the Premises or any part
      thereof for lease or sublease, or permit the use thereof for any purpose
      other than as above mentioned, without in each case the written consent of
      Lessor. Lessor hereby acknowledges that Lessee is current leasing portions
      of the Premises and approves of the continuation of the following lease on
      its existing terms: Industrial Building Lease dated September 28, 1998,
      with Kroy, L.L.C. d/b/a Mac's Snow Removal, expiring on May 22, 2000.
      Lessor also acknowledges that Lessee is currently negotiating an office
      lease with Tri-County Physicians and Lessor confirms that it will approve
      of any lease or sublease entered into between Lessee and Tri-County
      regarding office space on the Premises.

7.    INSURANCE. Lessee shall procure and maintain policies of insurance at its
      own cost and expense throughout the term of this Lease insuring:

            7.1 Lessor and Lessee from all claims, demands or actions for injury
      to or death of any person, in an amount of not less than $1,000,000 for
      injury to or death of more than one person in any one occurrence in an
      amount of not less than $1,000,000 and for damage to property in an amount
      of not less than $2,400,000 made by, or on behalf of, any person or
      persons, firm or corporation arising from, related to or connected with
      the Premises or any act or omission of Lessee together with an umbrella
      policy of $15,000,000. Said insurance shall comprehend full coverage of
      the indemnity set forth in Paragraph 10 hereof;

            7.2 Lessor and Lessee with the same limits of coverage as provided
      in subsection 7.1 for loss or damage by boiler or internal explosion or
      breakdown of boilers, if applicable;


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            7.3 Lessee from all worker's compensation claims;

            7.4 Lessor and Lessee against breakage of all plate glass utilized
      in the Building located on the Premises caused by Lessee; and

            7.5 Such other insurance, and in such amounts as may from time to
      time be reasonably required by Lessor and which is customary for buildings
      and operations that are similar to the Premises and Lessee's operations
      thereon.

8.    FORM OF INSURANCE. The insurance set forth in Section 7 above shall be
      placed with reputable companies and the form, substance and amount shall
      be (even to the extent inconsistent with the foregoing if requested by a
      mortgagee of Lessor) satisfactory to Lessor and any mortgagee of Lessor.
      Such insurance shall not be subject to cancellation or material change,
      except after at least thirty (30) days's prior written notice to Lessor
      and any mortgagee of Lessor. The original insurance policies (or
      certificates thereof satisfactory to Lessor) together with satisfactory
      evidence of payment of the premiums thereon shall be deposited with Lessor
      at the commencement date of this Lease and renewals thereof not less than
      thirty (30) days prior to the end of the term of each such coverage.

9.    WAIVER OF CERTAIN CLAIMS. Lessee waives all claims it may have against
      Lessor, its beneficiaries, agents and employees for damage or injury to
      persons or property sustained by Lessee or any persons claiming through
      Lessee or by any occupant of the Premises, or by any other person,
      resulting directly or indirectly from fire or other casualty, or any
      existing or future condition, defect, matter or thing in or about the
      Premises or any part thereof, or from any equipment or appurtenance
      therein or thereon, or from any accident in or about the Premises or from
      any occurrence, act, negligence or omission of any tenant, subtenant or
      other occupant of the Premises or any part thereof or of any other person,
      including Lessor, to the extent permitted by law. This Section 9 shall
      include, but not be limited to, damage caused by water, snow, frost,
      steam, excessive heat or cold, sewage, gas, odors, or noise, broken glass,
      sprinklers, flooding of basement or caused by bursting or leakage of pipes
      or plumbing fixtures, and shall apply equally whether any such damage
      results from the act or neglect of Lessee or of other tenants, or
      occupants of any part of the Premises or of any other person, including
      Lessor to the extent permitted by law, or whether such damage be caused by
      or result from any thing or circumstance above mentioned or referred to,
      or to any other thing or circumstance whether of a like nature or of a
      wholly different nature. All personal property belonging to Lessee or any
      occupant of the Premises that is in or on any part of the Premises shall
      be there at the risk of Lessee or of such other person only, and Lessor
      shall not be liable for any damage thereto or for the theft or
      misappropriation thereof.

10.   INDEMNITY FOR ACCIDENTS. Lessee covenants and agrees that it will protect
      and save and keep the Lessor forever harmless and indemnified against and
      from any penalty or damages or charges imposed for any violation of any
      laws or ordinances, whether occasioned


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      by the neglect of Lessee or those holding under Lessee, and that Lessee
      will at all times protect, indemnify and save and keep harmless Lessor
      against and from any and all loss, cost, damage or expense, arising out of
      or from any accident or other occurrence whatsoever on or about the
      Premises, causing injury to any person or property whomsoever or
      whatsoever and will protect, indemnify and save and keep harmless the
      Lessor against and from any and all claims and against and from any and
      all loss, cost, damage or expense arising out of any failure of Lessee in
      any respect to comply with and perform all the requirements and provision
      hereof.

11.   HAZARDOUS MATERIALS. Lessor and Lessee agree as follows with respect to
      the existence or use of "Hazardous Material" on the Premises or otherwise
      in the Building located thereon:

            11.1 Lessee, at its sole cost and expense, shall comply with all
      laws, statutes, ordinances, rules and regulations of any governmental
      authority having jurisdiction concerning environmental, health and safety
      matters, including, but not limited to, any discharge into the air,
      surface water, sewers, soil or groundwater of any hazardous material [as
      defined in Section 11.3 below], whether within or outside the Building
      located on the Premises.

            11.2 It shall not be unreasonable for Lessor to withhold its consent
      to any proposed assignment or sublease pursuant to Paragraph 6 if (i) the
      proposed assignee's or sublessee's anticipated use of the Premises
      involves the generation, storage, use, treatment or disposal of Hazardous
      Material, or (ii) the proposed assignee or sublease is subject to an
      enforcement order issued by any governmental authority in connection with
      the use, disposal or storage of a Hazardous Material.

            11.3 As used in this Lease, the term "Hazardous Materials" means any
      hazardous or toxic substance, material or waste which is or becomes
      regulated by any local government authority, the State of Illinois or the
      United States Government. The term "Hazardous Material" includes, without
      limitation, any material or substance which is (i) designated as a
      "hazardous substance" pursuant to Section 1311 of the Federal Water
      Pollution Control Act (33 U.S.C. Section 1317), (ii) defined as a
      "hazardous waste" pursuant to Section 1004 of the Federal Resource
      Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq. (42 U.S.C.
      Section 6903), or (iii) defined as a "hazardous substance" pursuant to
      Section 101 of the Comprehensive Environmental Response, Compensation and
      Liability Act, 42 U.S.C. Section 9601 et seq. (42 U.S.C. Section 9601) and
      asbestos.

            11.4 Any increase in the premiums for necessary insurance on the
      Premises which arises from Lessee's use and/or storage of these materials
      shall be solely at Lessee's expense. Lessee shall procure and maintain at
      its sole expense such additional insurance as may be necessary to comply
      with any requirement of any Federal, State or local government agency with
      jurisdiction.


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12.   SUBORDINATION OR SUPERIORITY. The rights and interest of Lessee under this
      Lease shall be subject and subordinate to any mortgage or first trust deed
      that has been or hereafter may be placed upon the Premises or the Building
      located thereon by Lessor and to any and all advances to be made
      thereunder, and to the interest thereon, and all renewals, replacements
      and extensions thereof. Lessee shall execute and deliver whatever
      instruments may be reasonably required for such purposes within five (5)
      days after demand in writing and in conjunction with any such request.

13.   RIGHTS RESERVED TO LESSOR. Without limiting any other rights reserved or
      available to Lessor under this Lease, at law or in equity, Lessor, on
      behalf of itself, its beneficiaries, its agents and assigns reserves the
      following rights to be exercised at Lessor's election:

            13.1 To change the street address of the Premises;

            13.2 To inspect the Premises during business hours after giving
      reasonable notice and to make repairs, additions or alterations to the
      Premises, at Lessor's or Lessee's expense as herein otherwise provided,
      specifically including, but without limiting the generality of the
      foregoing, to make repairs, additions or alterations within the Premises
      to mechanical, electrical, and other facilities;

            13.3 To show the Premises to prospective purchasers, mortgagees, or
      other persons having a legitimate interest in viewing the same, and to
      persons wishing to rent the Premises;

            13.4 To place and maintain the usual "For Rent" or "For Sale" signs
      in, on or about the Premises; and

            13.5 During the last ninety (90) days of the Lease term, if during
      or prior to that time Lessee vacates the Premises, to decorate, remodel,
      repair, alter or otherwise prepare the Premises for new occupancy.

      Lessor may enter upon the Premises during business hours for any and all
      of said purposes and may exercise any and all of the foregoing rights
      hereby reserved, without such entering being deemed an eviction or
      disturbance of Lessee's use or possession of the Premises, and without
      being liable in any manner to Lessee.

14.   SURRENDER AND REMOVAL OF TENANT'S PROPERTY. Upon the termination of this
      Lease, whether by forfeiture, lapse of time or otherwise, or upon the
      termination of Lessee's right to possession of the Premises, Lessee will
      at once surrender and deliver up the Premises, together with all
      improvements thereon, to Lessor in the same condition and repair as of the
      commencement date of this Lease, reasonable wear and tear excepted. All
      alterations, additions, hardware, non-trade fixtures and all improvements,
      temporary or permanent, in or upon the Premises placed there by Lessee
      shall become Lessor's property


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      and shall remain upon the Premises upon such termination of this Lease by
      lapse of time or otherwise, without compensation or allowance or credit to
      Lessee. If Lessor requests removal of said additions, hardware, non-trade
      fixtures and improvements, Lessee, at Lessee's sole cost and expense,
      shall remove the same and repair any damage to the Premises caused by such
      removal, and, if Lessee does not make such removal at said termination of
      this Lease, or within ten (10) days after such request, whichever is
      later, Lessor may (i) remove and deliver the same to any other place of
      business of Lessee or warehouse, and Lessee shall pay the cost of such
      removal, repairs to the Premises, delivery and warehousing to Lessor on
      demand, or (ii) treat such trade fixtures as having been conveyed to
      Lessor with this Lease by a Bill of Sale, without further payment, whether
      by set-off, credit allowance or otherwise, by Lessor or Lessee.

15.   NO WASTE OR MISUSE. Lessee shall restore the Premises to Lessor, with
      glass of like kind and quality in the several doors and windows thereof,
      entire and unbroken, as is now therein, and will not allow any waste of
      water or misuse or neglect the water or light fixtures on the Premises,
      and will pay all damages to the Premises caused by such waste or misuse.

16.   TERMINATION; ABANDONMENT; RE-ENTRY; RELETTING. At the termination of this
      Lease, by lapse of time or otherwise, Lessee agrees to yield up immediate
      and peaceable possession to Lessor, and failing so to do, to pay as
      liquidated damages, for the whole time such possession is withheld, the
      sum of two and one-half times the per diem rent then or most recently due
      under this Lease per day, and it shall be lawful for Lessor or its legal
      representatives at any time thereafter, without notice, to re-enter the
      Premises or any part thereof, either with or (to the extent permitted by
      law) without process law, and to expel, remove and put out Lessee or any
      person or persons occupying the same, using such force as may be necessary
      so to do, and to repossess and enjoy the Premises again as before this
      Lease, without prejudice to any remedies which might otherwise be used for
      arrears of rent or preceding breach of covenants. In case the Premises
      shall be abandoned, deserted, or vacated, and remain unoccupied five days
      consecutively, Lessee hereby authorizes and requests the Lessor as
      Lessee's agent to re-enter the Premises and remove all articles found
      therein, place them in some regular warehouse or other suitable storage
      place, at the sole cost and expense of Lessee, and proceed to re-rent the
      Premises at the Lessor's option and discretion and apply all money so
      received after paying the expenses of such removal toward the rent
      accruing under this Lease. This request shall not in any way be construed
      as requiring any compliance therewith on the part of Lessor, except as
      required by Illinois statute. If Lessee shall fail to pay the rent at the
      times, place and in the manner above provided, and the same shall remain
      unpaid five days after the day whereon the same should be paid, Lessor by
      reason thereof shall be authorized to declare the Lease Term ended, and
      Lessee hereby expressly waives all right or rights to any notice or demand
      under any Illinois statute relative to forcible entry or detainer or
      landlord and tenant, and agrees that the Lessor, its agents or assigns may
      begin suit for possession or rent without notice or demand.


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17.   REMOVED PROPERTY. In the event of re-entry and removal of the articles
      found on the Premises as hereinbefore provided, Lessee hereby authorizes
      and requests Lessor to sell the same at public or private sale with or
      without notice, and the proceeds thereof, after paying the expenses of
      removal, storage and sale to apply towards the rent reserved herein,
      sending the overplus, if any, to Lessee upon demand.

18.   CONFESSION OF JUDGMENT. If default be made in the payment of rent, or any
      installment thereof, as herein provided, Lessee hereby irrevocably
      constitutes any attorney of any Court of Record in this State, attorney
      for Lessee and in Lessee's name, from time to time, to enter the
      appearance of Lessee, to waive the issuance of process and service
      thereof, to waive trial by jury, and to confess judgment in favor of
      Lessor against Lessee for the amount of rent which may be then due
      hereunder, together with costs of suit and a reasonable sum for
      plaintiff's attorneys fees in or about the entry of such judgment, and to
      waive and release all errors and right of appeal from any such judgment,
      and to consent to an immediate execution thereon.

19.   OPTION TO TERMINATE. In the event that Lessor, its successors, attorneys
      or assigns shall desire to regain the possession of the Premises herein
      described and terminate this Lease for any reason, Lessor shall have the
      option of so doing upon giving Lessee thirty (30) days notice of Lessor's
      election to exercise such option.

20.   RELATIONSHIP OF PARTIES. Nothing contained herein shall be deemed or
      construed by the parties hereto, nor by any third party, as creating the
      relationship of principal and agent, partnership or joint venture by the
      parties hereto, it being understood and agreed that no provisions
      contained in this Lease nor any acts of the parties hereto shall be deemed
      to create any relationship other than the relationship of lessor and
      lessee.

21.   CORPORATE STANDING AND AUTHORITY. Lessee hereby represents and warrants to
      Lessor that Lessee is duly incorporated and is in good standing under the
      laws of said state or states as applicable, and is authorized to do
      business in the State of Illinois and has due authority to execute this
      Lease.

22.   TIME OF ESSENCE. Time is of the essence of this Lease, and all provisions
      herein relating thereto shall be strictly construed.

23.   GOVERNING LAW. This Lease shall be construed and enforced in accordance
      with the laws of the State of Illinois.

24.   NO RENT DEDUCTION OR SET OFF. Lessee's covenant to pay rent is and shall
      be independent of each and every other covenant of this Lease. Lessee
      agrees that any claim by Lessee against Lessor shall not be deducted from
      rent nor set off against any claim for rent in any action.


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25.   RENT AFTER NOTICE OR SUIT. It is further agreed, by the Parties hereto,
      that after the service of notice or the commencement of a suit or after
      final judgment for possession of the Premises, Lessor may receive and
      collect all rents due, and the payment of said rent shall not waive or
      affect said notice, said suit, or said judgment.

26.   PAYMENT OF COSTS. Lessee will pay and discharge all reasonable costs,
      attorney's fees and expenses that shall be made and incurred by Lessor in
      enforcing the covenants and agreements of this Lease.

27.   RIGHTS CUMULATIVE/WAIVER. The rights and remedies of Lessor under this
      Lease are cumulative. No failure by Lessor to exercise any of its rights
      hereunder or to insist upon strict compliance with respect to any
      obligation hereunder, and no custom or practice of the Parties at variance
      with the terms hereof shall constitute a waiver by either Party to demand
      exact compliance with the terms of this Lease. Waiver by either Party of
      any particular default by the other Party shall not affect or impair such
      Party's rights in respect to any subsequent default of the same or of a
      different nature, nor shall any delay or omission of either Party to
      exercise any rights arising from any default by the other Party affect or
      impair such Party's rights as to such default or any subsequent default.

28.   ENTIRE AGREEMENT. All understandings and agreements, oral or written,
      heretofore made between the parties hereto are merged in this Lease, which
      alone fully and completely recites the agreement between Lessor, its
      agents and beneficiaries, and Lessee.

29.   SEVERABILITY. Wherever possible each provision of this Lease shall be
      interpreted in such manner as to be effective and valid under applicable
      law, but if any provision of this Lease shall be prohibited by or invalid
      under applicable law, such provision shall be ineffective to the extent of
      such prohibition or invalidity, without invalidating the remainder of such
      provision or the remaining provisions of this Lease.

30.   AMENDMENTS MUST BE IN WRITING. None of the covenants, terms or conditions
      of this Lease, to be kept and performed by either Party, shall in any
      manner be altered, waived, modified, changed or abandoned, except by a
      written instrument, duly signed, acknowledged and delivered by the party
      against which such modification is being asserted.

31.   PLURALS; SUCCESSORS. The words "Lessor" and "Lessee" wherever used in this
      Lease shall be construed to mean Lessors or Lessees in all cases where
      there is more than one Lessor or Lessee, and to apply to individuals, male
      or female, or to firms or corporations, as the same may be described as
      Lessor or Lessee herein, and the necessary grammatical changes shall be
      assumed in each case as though fully expressed. All covenants, promises,
      representations and agreements herein contained shall be binding upon,
      apply and inure to the benefit of Lessor and Lessee and their respective
      heirs, legal representatives, successors and assigns.


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      This Lease has been executed by one or more corporations, and such
executions have been authorized by a duly adopted resolution of the Board of
Directors of such corporations.

      This Lease consists of 9 pages numbered 1 through 9.


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WITNESS the hands and seals of the Parties hereto, on the Date of the Lease
stated above.

LESSEE: CTI INDUSTRIES CORPORATION      LESSOR: PEPPER ROAD, INC.


By:  /s/ Howard W. Schwan               By:  /s/ Howard W. Schwan
     ------------------------                -----------------------------------

Its: President                               Its: Vice-President

                              ASSIGNMENT BY LESSOR

      On this ___________________, 19______, for value received, Lessor hereby
transfers, assigns and sets over to _______________________, all right, title
and interest in and to the above Lease and the rent thereby reserved, except
rent due and payable prior to _____________________, 19______.

                                        __________________________________(SEAL)

                                        __________________________________(SEAL)


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                                    EXHIBIT A

                         DESCRIPTION OF LEASED PREMISES

      All of the real property commonly known as 22222 North Pepper Road,
Barrington, Illinois, including all Buildings and parking facilities located
thereon, such property bearing the following legal description:

      THAT PART OF THE SOUTH 1/2 OF SECTION 21, TOWNSHIP 43 NORTH, RANGE 9, EAST
      OF THE THIRD PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS: COMMENCING AT A
      POINT IN THE EAST LINE OF THE WEST 1/2 OF THE SOUTHEAST 1/4 OF SAID
      SECTION 21, 983.62 FEET NORTH OF THE SOUTHEAST CORNER THEREOF; THENCE WEST
      PARALLEL WITH THE SOUTH LINE OF SAID SOUTHEAST 1/4, 699.98 FEET; THENCE
      NORTHERLY 332.59 FEET TO A POINT 323.17 FEET NORTH AND 648.28 FEET WEST OF
      THE POINT OF BEGINNING; THENCE EASTERLY PARALLEL TO THE SOUTH LINE OF SAID
      SOUTHEAST 1/4, 648.28 FEET TO THE EAST LINE OF THE WEST 1/2 OF SAID
      SOUTHEAST 1/4; THENCE SOUTH 323.17 FEET TO THE POINT OF BEGINNING,
      (EXCEPTING THEREFROM THE EAST 33 FEET THEREOF) IN LAKE COUNTY, ILLINOIS.