CHICAGO—The industrial market in I-55 corridor has seen a spike of speculative development, but the competition there did not dissuade Conor Commercial Real Estate, a member of the McShane Companies, and its partner Gallagher and Henry from launching Phase 3 at its 80-acre Union Pointe industrial business park in south suburban Woodridge. The partners plan to complete the 256,880-square-foot facility in the second quarter of 2015.
“Due to our visibility along I-355 we felt we could extract premium rents,” Daniel E. Fogarty Jr., vice president of Conor, tells GlobeSt.com, making a speculative project feasible. “We were originally planning to go vertical on a speculative basis perhaps in the spring.”
But the plan was vindicated much earlier than expected when the Kellogg Company signed a seven-year lease for 135,213-square-feet of space in the proposed Building Three. “We learned as we were involved in planning that Kellogg needed the space in April 2015,” Fogarty says. “That compelled us to pick up the pace.” The partners decided to break ground this week in order to meet their new tenants' deadline.
“The I-55 corridor is historically a distribution market and I assume the remaining 121,000-square-feet of space will be occupied by one or two distributors and they could come from almost any type of company that you could imagine,” he adds. However, “it's not limited to investment-grade clients like Kellogg.”
As reported in GlobeSt.com, for example, on another portion of the park, Conor recently completed a 347,400-square-foot build-to-suit corporate headquarters and warehouse facility for Orbus Exhibit & Display Group. Unlike Kellogg, Orbus has only been around 11 or 12 years. Still, Fogarty says it contains other companies that have been around much longer, and has good margins and “great market share.”
Although Fogarty can't divulge any details about Kellogg's lease or any offers they may be fielding for Building Three, he does say that “we are witnessing a 10% to 15% premium in rent primarily due to its access and visibility.”
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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.
