CHICAGO—Industrial users have been absorbing new space in the Chicago region almost as fast as developers can put it up. So it's no surprise that Hillwood, a Perot company, has just decided to launch another major speculative development in the area, and this one will be the largest one underway. The Dallas-based developer recently closed on the acquisition of an 84.86-acre landsite in suburban Joliet and will begin construction immediately on a 992,640-square-foot distribution center with capacity to expand to 1.5 million square feet.

Hillwood has developed four other properties in the Chicago region, totaling nearly 1.3 million square feet, over the past 15 months. One of these projects was a 746,772-square-foot spec building at 201 Emerald Dr., also in Joliet. Amazon.com's decision earlier this year to completely occupy it provided a big boost to the local economy and illustrated the robust level of demand in the market.

“We were very pleased that Amazon decided to lease our first Chicago-area spec building, which had proved to be of interest to several prospective tenants,” Don Schoenheider, Hillwood's senior vice president and Midwest market leader, tells GlobeSt.com. “We remain confident in this market and its growth and continue to see strong tenant activity.”

Many in the industry agree with that assessment. According to Colliers International, by the end of the second quarter, developers had 11.7 million square feet of big box construction underway in the Chicago region, of which 13 projects, representing 52.9% of the ongoing construction activity, were being built on a speculative basis.

“Hillwood's development activity continues to grow, both in the Chicago market and across the US,” Schoenheider adds. “This property is one of eight, 1 million-square-foot distribution centers developed over the last 18 months and Hillwood currently has more than 8.4 million square feet under construction. We have had great success by targeting centrally located markets throughout the Midwest and developing quality projects that cater to our customers' needs.”

The new building will offer tenants visibility from Rte. 53 and access to I-80 and I-55 as well as close proximity to both BNSF and Union Pacific intermodal operations. It will have 36' clear heights, cross-dock configuration and an ESFR fire protection system with K17 heads. A total of 116 trailer parking spaces will be available along the dock wall with an additional 150 remote spaces. Up to 222 spaces will be available for auto parking with another 310 available for future expansion.

“Joliet has continually been a great market for e-commerce and logistics tenants, primarily because it offers an outstanding labor pool and excellent transportation infrastructure,” says Schoenheider, and “there are still other sites that could accommodate a building of this size. However, as financing continues to become more difficult to secure, few developers are willing to start a new project this large without a tenant. In addition, the availability of labor has become even more critical and many of the sites that could handle a development of this size are further away from a strong, well-trained labor base like we have in the Joliet/Will County area.”

Target completion for this development is mid-2017. FCL Builders will serve as the general contractor and CBRE brokers Traci Payette and John Suerth will be the leasing agents.

Instant Insights /

Hillwood Starts Construction on Chicago's Largest Spec Development

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