Industrial Facilities Moving Closer to the Urban Core
Chicago is about to get its largest speculative project in more than one hundred years.
CHICAGO—In the past few years, Chicago-area developers have been building a historic amount of new industrial facilities, mostly outside the city boundaries. But the growing demand for space closer to the urban core is bringing change.
A joint venture between MAT Limited Partnership and institutional investors advised by J.P. Morgan Asset Management recently started work on Marina Crossings, Chicago’s largest speculative industrial project since the 260-acre Central Manufacturing District broke ground on Pershing Rd. in 1905. The 35-acre Marina Crossings is in the McKinley Park/Stockyards area of Chicago, just blocks away from the historic CMD. The rail-served property will have more than 633,000 square feet and feature 32’ clear ceilings, cross docking, precast construction, and ample expandable car and trailer parking. It’s also a sign of things to come.
“Developers are definitely looking for developable sites in the city; more than I’ve seen in 20 years,” Larry Goldwasser, managing director, Cushman & Wakefield, tells GlobeSt.com. And the reasons for that are simple. “Companies want to be closer to the city’s dense population,” whether to ease deliveries to individual customers or the many downtown businesses, especially hotels and restaurants. C&W was brought on board to handle leasing for the project, and “all types of businesses have already taken a look.”
The city’s deep labor pool is also a big draw, he adds. Now that the I-55 submarket is considered an infill location, developers have been breaking ground on projects closer to I-80 or even in WI. And “the farther they get from the city, the more trouble they have hiring people,” especially the office workers needed for such operations.
The developers will complete the building in this year’s fourth quarter, Goldwasser says. It’s a flexible project with access to a lot of power, making it appropriate for e-commerce fulfillment, manufacturing, food production and distribution, cold storage, logistics, or even as a data center. “It could really be anything.”
Just blocks from the geographical center of the city and 15 minutes from downtown, Marina Crossings is just off the I-55 expressway and located between the 35th St./Archer and Western Ave. “L” train Orange Line stops.
The CMD was the first planned manufacturing district in the US, but today most of its remaining buildings are underutilized or vacant. Goldwasser believes many of the structures still have potential, including use as light industrial, office and even residential. And along with projects like Marina Crossings, the surrounding neighborhood could play a role in any revival.
“McKinley Park is gorgeous, and the whole neighborhood has been in the news a lot,” he says. The area has a growing arts community, for example, and homebuyers have started flocking there as well. But McKinley Park’s growing viability is still not yet well known to many potential tenants.
“The best way to explain its advantages is to get them in a car and drive around,” Goldwasser says. “Once they see the benefits of being in the city, they are sold.”