In addition to a new facility in Bolingbrook being leased by Guinness UDV, Duke Realty Corp. is building a 305,094-sf bulk distribution warehouse facility on speculation in the Carol Stream Industrial Park. Completion is expected in June. The projects are among 4.7 million sf of space under development by the REIT, at a cost of $245 million. At an average of $52.11 per sf, the Northlake project would cost $20 million with another $16 million in Carol Stream.
"With the International Paper site we have the ability to transform a 35-year-old, functionally obsolete building into a state-of-the-art distribution facility within the heart of the O'Hare corridor," says Duke Realty senior vice president Jim Connor.
The project is underway as direct vacancy rates in the O'Hare submarket have crept above 8%, still on the low side compared to the rest of the industrial market. Lease rates in the submarket are about $3.75 per sf, which could make the International Paper redevelopment project worth about $1.4 million a year to the office/industrial REIT.
The vacancy is about the same in the west suburban submarket, but an average lease rate of $5.20 per sf would make the speculative project in Carol Stream worth nearly $1.6 million a year.
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