2447 E. Higgins Rd. in Elk Grove Village, IL, part of the O'Hare Peninsula Business Park, a class A development now 100% occupied.
CHICAGO—There are several encouraging signs that 2017 will be another great year for Chicago's industrial market. For one thing, even after 27 consecutive quarters of growth, users continue to show an appetite for class A spaces. In fact, an increasing number of landlords have filled up all of their available buildings.
Two new deals at O'Hare Peninsula Business Park, a class A development in suburban Elk Grove Village with seven buildings totaling 256,916 square feet, just brought it to full occupancy.
The Hudson Group, an East Rutherford, NJ-based retailer which operates a chain of newsstands, bookstores and fast food restaurants, leased 71,478 square feet there, and Anderson, CA-based Sierra Pacific Industries, leased the remaining 23,826 square feet.
Christopher Lydon, Al Caruana and Britt Casey of Cushman & Wakefield represented ownership. A tenant representative team of Ray Trevisan, also of C&W, Caruana and Casey represented Hudson. Sierra was represented by Cal Payne of CBRE.
“Both companies were attracted to the high-end image of the park along with the proximity to O'Hare International Airport,” says Lydon. “We are very pleased to complete these two transactions, which bring us to a 100% occupancy.”
The region's industrial market is on a historic run. The vacancy rate for the Chicago metro area sank to 7.6% at the end of 2016, a ten-year low, according to a recent report from Newmark Grubb Knight Frank. In several submarkets, including O'Hare, things look even better. The rate there hit just 5.2%, after 1.6 million square feet of positive absorption for the year.
Users throughout the region continued to soak up space in the fourth quarter. A total of 6.3 million square feet came online in the last three months of 2016, NGKF says, but net absorption totaled 7.1 million square feet. And developers are responding. At the end of the fourth quarter, 18.8 million square feet was underway, and new projects are ready to go.
Officials from The Opus Group, for example, say they plan to construct a 111,345-square-foot speculative industrial development at the company's Paragon Business Park in Romeoville, part of the I-55 submarket. Opus has already constructed and sold two other speculative industrial developments at Paragon in 2016.
“We're one of the only developers in the entire submarket able to provide an opportunity for end users to purchase a class A building, new or existing,” says Matt Kurucz, senior manager, real estate development, Opus Development Co., LLC. “The I-55 corridor continues to prove itself as a highly sought after location for industrial tenants and institutional investors will continue to dominate the ownership of the nearly 80 million square feet of inventory. As such, there is ample opportunity for Opus to offer a unique solution to tenants seeking new space.”
The new building will feature 30' clear height and can accommodate a single user or up to three tenants, he adds. Additionally, the building will have 12 loading docks, 16 trailer parking positions against the building, up to 88 car parking spaces.
Opus will begin construction this spring and plans to complete the project by late August 2017. Opus Development Co., LLC will be the developer, Opus Design Build, LLC will be the design-builder and Opus AE Group, LLC will be the architect and structural engineer of record. Jason West and Sean Henrick of C&W will market the property for lease.
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
