CHICAGO—Duke Realty Corp. has just agreed to construct a new 499,154 square-foot, build-to-suit warehouse for Fellowes Inc. in Butterfield Corporate Park in suburban Aurora. Fellowes will lease the new facility and use it as its main US distribution center. According to officials from Colliers International, who helped put the deal together, the transaction is the Chicago area's largest build-to-suit year-to-date.

A global manufacturer and marketer of business machines, records storage and office accessories, Fellowes employs more than 1,500 people throughout the world and has operations in 16 countries. The new facility will allow the company to consolidate its leased space at 6524 Muirfield Dr. in Hanover Park, IL and its owned Itasca, IL facilities at 1625 Norwood Ave. and 1612 Glenlake Ave. Fellowes occupies about 525,000 square feet within those facilities, and has hired Colliers to sell the two owned properties. The company will relocate to the new Aurora facility, located at the northwest quadrant of Rte. 59 and Ferry Rd. in Aurora, just one-half mile north of the four-way interchange at I-88 and Rte. 59, by May 2016.

“The Duke location was attractive because it will enable it to keep its existing workforce and it's proximate to many existing customers,” David A. Bercu, a principal with Colliers, tells GlobeSt.com. He and Daniel E. Arends, also a principal, represented Fellowes in the transaction. Duke was represented by listing agents David Prell, John Suerth and Traci Buckingham Payette with CBRE and Duke's Susan Bergdoll.

The economy's brightening outlook, especially for the industrial sector, also played a role in cementing the deal. Fellowes, for example, felt that switching from owned facilities to a leased one would allow it to invest more money into its business, a more profitable strategy than keeping it in real estate, Bercu says. And “Duke was very aggressive in pursuing them as a tenant. The lease rate was very compelling, especially for a building of this quality.”

The overall first quarter vacancy rate in the Chicago region fell to 7.59%, down 14 bps from the fourth quarter and the lowest rate since it hit 6.94% in the third quarter of 2001, according to Colliers. Developers broke ground on four projects in the first quarter which will add 1.6 million square feet to the region's inventory. And developers also plan to start 24 new projects, 5 build-to-suit and 19 speculative, during the second quarter which will add 7.8 million square feet of new inventory to the market.

“In general,” Bercu adds, “you're seeing companies willing to take on bigger projects now that the economy has improved.”