The Logistic Campus in Glenview, the redeveloped former home of Allstate along the Tri-State Tollway, has landed its second major tenant.
A bottling division of Pepsi Beverages signed a lease for a 351,520-square-foot warehouse to be built at the far southern end of The Logistic Campus. While the five-building first phase of the sprawling development remains mostly empty, the Pepsi warehouse is breaking ground on the planned second phase, with the lease beginning in February.
Dermody Properties, the developer behind the slow-to-lease north suburban logistics site, announced the deal for the build-to-suit Pepsi warehouse Wednesday. Terms of the lease were not disclosed.
“We welcome PepsiCo to The Logistics Campus,” Neal Driscoll, Midwest region partner at Dermody, said in a news release. “Positioned in one of Chicago’s most active submarkets, The Logistics Campus is well equipped to support PepsiCo’s growth and evolving logistics needs.”
The Nevada-based developer bought the former Allstate campus for $232 million in 2022, with plans to build one of the largest urban logistics developments in the U.S. on the 232-acre site, which was annexed into Glenview. But the logistics site is off to a slow start, with far more geese than trucks roaming the grounds amid a soft post-pandemic industrial leasing market.
The transformative $500 million project calls for a 10-building, 3.2 million-square-foot logistics park. Five massive warehouses were delivered on Oct. 1, but only one tenant has signed a lease with intent to move into the first phase of development.
HuFriedyGroup, a century-old, Chicago-based dental equipment manufacturer, signed a lease in March for a 326,278-square-foot-building near Willow and Sanders roads in the first phase of the development. A HuFriedyGroup spokesperson did not respond to a request for comment Wednesday on the target date for moving into its new Glenview digs.
California-based Upside Foods was announced in September 2023 as the site’s first tenant after signing a long-term lease for 187,000 square feet to build out the first large-scale cultivated meat plant in the U.S. But those plans were put on hold last year, with no target date for launch.
Pepsi is building the first warehouse in the planned second phase, with site work underway and a target delivery by the first quarter of next year, Dermody said.
In addition to its namesake cola, Pepsi Beverages manufactures and distributes a broad portfolio of soft drinks, bottled water, energy drinks and fruit juices.
In an email Wednesday, Pepsi confirmed the lease, but offered no guidance on timing, plans for the facility or potential jobs created in Glenview.
“We have signed an agreement to build a new PepsiCo facility in Glenview, Illinois,” the company said. “The location will help us better serve our customers and consumers.”
Meanwhile, Dermody still has four warehouses and nearly 700,000 square feet available for lease in the first phase of the development at The Logistics Campus.
“We continue to talk with a lot of companies wanting to do more than just store products which typically means they have several months of set up before they open for business,” Driscoll said in a email Wednesday. “Leasing activity in Chicago could be characterized as cool at the moment, as is the case every year in the middle of summer, but we still have a healthy list of prospects.”
Demand for industrial space declined significantly in the post-pandemic landscape, with high vacancy rates and a dearth of development. While there have been signs of recovery this year, vacancy rates in the Chicago market are up slightly year-over-year to 6.3% while new construction is down 24%, according to a second quarter report by Avison Young.
Industrial vacancy in northern Cook County was flat year-over-year at 6.5%, with only one project in the development pipeline — the build-to-suit warehouse under construction at The Logistics Campus in Glenview, according to the report.
At the same time, Avison Young noted that seven new speculative projects totaling 1.4 million square feet broke ground in the second quarter across the Chicago market, signaling “renewed market confidence,” according to the report.
