Industrial demand appears to be heating up again in the Chicago market. At least that is the conclusion to be reached from three recent announcements of major speculative warehouse/distribution buildings that will be going up in the suburbs this fall.
UPS Properties said it has broken ground on a 300,000-square-foot warehouse building at the 242-acre Crossroads Distribution Center at Interstate Highway 55 and Illinois Highway 53 in southwest suburban Bolingbrook.
Planned as just a 110,000-square-foot project, UPS officials decided to expand the building due to what UPS Properties real estate manager Jim Passolt said was signficant market demand.
“We’ve enlarged the warehouse because industrial activity is picking up in the Chicago area and there is increased demand for modern industrial structures that can accommodate the latest warehousing and distribution technology,” Passolt said.
The facility, scheduled to be available for occupancy by January, will have 30-foot ceilings and precision flat floors that allow use of state-of-the-art racking systems.
The building was designed by Karl Heitman Architects Inc. and is being built by FCL/Stava Group. The industrial group of Frain Camins & Swartchild is marketing the property.
In north suburban Waukegan, developer Northpoint Associates has acquired a site in order to develop a speculative industrial building of 128,000 square feet. The project, in the Northpoint Business Center on Northpoint Drive, will feature 30-foot ceilings and 22 exterior truck docks. Office space will also be available.
“In certain parts of the metro area, particularly in the north and northwest suburbs, there is a significant shortage of high-cube, functionally desirable space,” said Mitchell Rothstein of Grubb & Ellis, whose industrial division completed the land transaction and will lease the projct.
Grubb & Ellis has also joined forces with Amli Realty Co. to develop and market a speculative industrial building in northwest suburban Crystal Lake. The 118,400-square-foot building is under construction at 450 Congress Parkway in the Crystal Lake Business Center and is set for occupany in November.
“Amli is in a great position to capitalize on the increasing demand for this new high-cube space and the excellent labor pool in this fast growth area,” said Stephen Trapp, who along with Grubb & Ellis colleague Brian Carroll will market the space.
In recent years, warehousing and distribution operations have changed radically, both with the advent of new automated stacking and sorting systems as well as businesses’ demands for just-in-time delivery.
That has created new demands on industrial space, rendering many older facilities, which tend to have ceilings that are too low and docks that are too narrow to make efficient use of the new systems, obsolete.
Building to suit
While speculative industrial development is based on the assumption that tenants will be along to fill the space, there are still plenty of build-to-suit industrial deals that are getting done these days, too.
Amli Realty Co. has broken ground on a 122,100-square-foot office/manufacturing facility for Fleetwood Systems Inc. The site, 12-acres in the 500-acre Windham Lakes Business Park in southwest suburban Romeoville, will be able to accommodate a 100,000-square-foot expansion.
Fleetwood, currently located in Countryside, designs and manufactures material handling systems for container manufacturers and users. The company expects to move 200 employees to the facility, which is scheduled for completion in March.
Fleetwood Systems was represented by Gary Godina of Cushman & Wakefield; Windham Lakes was represented by Eric Friedler of Amli. Julie Kwasek is the project architect.
In north suburban Waukegan, Medline Industries Inc., a Mundelein-based maker of medical supplies, has leased a 100,000-square-foot building being developed by Northpoint Associates at Northpoint Business Center.
The facility will house the custom sterile division of Medline and include offices, warehouse space and a “clean room” sterile laboratory of 30,000 square feet. The building, which is expected to be completed in February, could eventually employ 300.
In Bensenville, McShane Construction Corp. last week broke ground on a 72,000-square-foot regional office and distribution center for Intertrans Corp., a Dallas-based international freight forwarding firm. The project is at Supreme and Thomas Drives in the Bensenville Distribution Center.
The project represents a major expansion for Intertrans, which is located in just 23,000 square feet near O’Hare International Airport. Company officials say the signing of the North American Free Trade Agreement and the opening of more trade with Europe has fueled growth.
Britt Casey with Grubb & Ellis brokered the land deal. McShane vice president Jacob Kiferbaum is heading construction for the project. Scott Hindsley of ArchIdeas is the architect.
And at Elmhurst Business Park in the west suburb, ground has been broken on a 69,500-square-foot manufacturing/assembly/warehouse facility for Northwestern Golf/Pro Select Inc. The build-to-suit project is on 3.9 acres on Church Court in the new park.
Northwestern Golf/Pro Select makes golf clubs, golf equipment and other related sports products. Its new facility will consolidate operations from two facilities on the city’s Northwest Side, one in Elmhurst and its corporate offices in Oakbrook Terrace.
Industrial Developments International is the developer. Dan Fanelli, senior associate with Darwin Realty & Development Corp., represented all parties in the transaction.
Planting a good seed
Chicago Sinai Congregation, Chicago’s oldest Reform Jewish congregation, on Sunday will consecrate the site for its new building on Delaware Place between State and Dearborn Streets.
“Since the date of the consecration falls on the Jewish celebration of Succos, we also are planning to build a succah (a temporary shelter) on the site so our members and their families can celebrate this festive holiday, which commemorates the fall harvest,” said Joan Epstein, congregation president.
Chicago Sinai, founded in 1861, has had its house of worship at 5350 South Shore Drive for 40 years. Its new building is expected to be completed within the next two years.
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Steve Kerch’s columns appear in Real Estate on Sunday and in Your Money on Thursday.
