CHICAGO—Google's plan to move into the Fulton Market area has already begun transforming that neighborhood, long the center of food storage operations. These older businesses around Google's future home may no longer fit into the neighborhood's new high-tech vibe, and developers have cast their eyes on a number of properties several miles outside the Loop as they look to provide alternatives.
The Wanxiang America Real Estate Group and Clarius Partners, LLC, for example, recently acquired the former APL Logistics facility at 2302 S. Paulina in Chicago for $6.6 million and plan to build, on a speculative basis, a 162,000-square-foot warehouse building targeted at food distributors. The partners plan to demolish the existing building and eventually develop up to 400,000-square-feet in three major buildings on the 22.68-acre site, dubbed Pilsen Park Chicago.
“Food companies are getting pushed out of Fulton Market,” Mark Nelson of NelsonHill tells GlobeSt.com. A lot of the aging industrial structures in the neighborhood have traded hands and prices are rising. However, “even though a lot of these guys see the value in selling and want to take advantage of these changes, many have nowhere to move.”
Nelson and Doug Hayes, the managing director of NelsonHill, represented Elgin-based Wanxiang in this transaction. David Lane of Burr Tempkin represented the seller, American Presidents Lines. NelsonHill has also been hired to handle leasing for the new venture.
"I think this is an ideal location,” Nelson says. “It's next to the International Produce Center, which is fully-occupied, near the four-way interchange at Damen Ave. and I-55 and close to the downtown. Also, the city of Chicago hasn't seen new development in the past six to seven years. It has a lot of older, vintage facilities so it's definitely ready for new speculative development.”
They are open to a possible sale, but for now, are more focused on securing tenants for long-term leases. The building can be divided into five or six spaces, but “if someone came along and wanted half of the building that would be great,” he says. They expect to deliver the first building by spring 2015, and then begin to consider plans for the second and third buildings of 167,880-square-feet and 77,440-square-feet.
“We put out four RFPs during our due diligence,” he adds, and was satisfied with the level of interest shown. Although the project is still officially considered speculative, NelsonHill has begun talking with potential tenants, leaving the possibility that the project could turn into a build-to-suit. “We're pretty close to a deal.”
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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.
