CHICAGO—The metro area's role as a multimodal transportation hub is altering several sectors of commercial real estate, and few companies provide a better illustration of this than global logistics provider C.H. Robinson. The company just signed a seven-year deal for a 235,000 square foot commercial office building and warehouse at 333 Howard Ave. in suburban Des Plaines. The move comes on the heels of its agreement with Sterling Bay to occupy a 207,000 square foot build-to-suit located at 1511 W. Webster Ave. in Lincoln Park that will help tranform the former industrial site into a new office center.
More than 1,000 employees will move into the Lincoln Park site, and starting in early 2016, about 150 will work out of the Des Plaines building. C.H. Robinson is the largest logistics company in Chicago and has roughly doubled its local headcount since 2005. Its nearly 2,000 Chicago employees account for almost 15% of its global workforce.
"Chicago is one of the most important markets in our global shipping network, thanks to its connectivity to Class I rail, ocean shipping, truck transportation and one of the world's leading airports," says Mike Short, president of global forwarding at C.H. Robinson. "This move will enable our customers to have better access to these transportation options, and will position our company to build on our decade of rapid expansion in Chicago."
The new facility on Howard Ave. was a speculative project launched by Liberty Property Trust earlier this year, its first in the area and just one of several new O'Hare specs. As reported in GlobeSt.com, for example, DCT Industrial recently selected Morgan/Harbour Construction to construct the DCT O'Hare Logistics Center, an 112,862 square foot warehouse facility at 2200 Arthur Ave. in Elk Grove Village just minutes from the airport.
"This was a very exciting project for Liberty because it was not only Liberty's first redevelopment in O'Hare, but our first in the entire Chicago market," Neal Driscoll, vice president, tells Globe St.com. "The acquisition market is so competitive right now, the opportunity to create value for our shareholders is in redevelopment, though these projects are much more challenging to find and redevelop successfully around the airport."
The vacancy rate for industrial properties around the airport has now declined for 12 straight quarters and recently sank to just 5.35%, the lowest since the first quarter of 2001, when a rate of 5.32% was reported, according to Colliers International.
C.H. Robinson plans to use the Howard building as a major hub for both North American and international freight consolidation operations. Companies that book less-than-full loads of freight on trucks, ships, and airplanes will have their shipments packaged with other loads to create efficiencies in the supply chain.
"We signed our first lease for a Chicago-based freight consolidation facility 10 years ago, and that building was 30,000 square feet," says Eric Shover, the company's vice president of North America global forwarding. "The fact that we just leased a facility with 235,000 square feet speaks to the immense growth we've been able to achieve in Chicago over the past decade, and the aggressive plans we have for the future."
"We were very confident in this redevelopment from the start," Driscoll adds. "It was designed for a 3PL requiring a high throughput layout including air cargo activities. Turning around and leasing it to C.H. Robinson so quickly after delivery certainly affirmed our strategy."
"We were very confident in this redevelopment from the start," Driscoll adds. "It was designed for a 3PL requiring a high throughput layout including air cargo activities. Turning around and leasing it to C.H. Robinson so quickly after delivery certainly affirmed our strategy."
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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.
