CHICAGO—The vacancy rate among Chicago-area industrial properties fell throughout 2013, and the increased demand helped entice many developers into building facilities on a speculative basis. And although Clarius Partners, LLC recently completed a 1.0 million-square-foot speculative bulk warehouse distribution facility at Clarius Park Joliet, most developers have opted for more modest projects.
A joint venture between Panattoni Development Company and LaSalle Investment Management, for example, has just completed the Central DuPage submarket's only new speculative industrial building – a 139,781-square-foot facility at 201 Gary Ave. in Roselle. It sits within the Turnberry Lakes Business Park within walking distance of the Metra rail station and near the Elgin-O'Hare Expressway.
Panattoni has hired Ronald J. Behm, Jeffrey J. Kapcheck and Matthew J. Stauber, all principals with Colliers International | Chicago's Industrial Advisory Group, to lease the property, the third building in a five-building development plan. The same team successfully leased the first two Turnberry speculative buildings which have about 140,000-square-feet. The remaining two, with 152,243-square-feet and 154,110-square-feet, are build-to-suits.
The developers can divide the 201 Gary Ave. building down to 30,000-square-feet and expand the eighteen docks to thirty-six. It has two drive-in doors, 112-car parking, 30' clear ceiling height, and ESFR sprinklers.
"We feel this represents a great opportunity to construct a facility in a size range that is actually in demand," says John Pagliari, partner with Panattoni. "This building is in a 'feeder' location with low taxes, which is a great opportunity for tenants in both the Central DuPage and O'Hare submarkets."
According to Colliers, developers have seven speculative projects underway in the Chicago metropolitan area totaling 2.4 million-square-feet. "The Chicago area industrial vacancy rate fell to 8.7% at year-end 2013 — a significant decline from the 9.51% vacancy rate reported one year ago," researchers note. "This marks the second consecutive quarter that vacancy remained below 9.0%." Furthermore, the Central DuPage market saw a vacancy rate improvement of more than 200 bps from one year ago.
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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.
