Work Begins on Offices at $100M Project

"We're starting slow to develop leasing momentum, and in St. Charles, single-story office is already well-accepted," Paul Robertson, EVP of development with JCF, tells GlobeSt.com. "We're trying to create Class A office, which doesn't exist in this market, so we're starting with a product size that's familiar to the market to create leasing momentum." JCF also has a three-story, 45,000-square-foot office building designed, but has decided to wait until the economy improves to construct it.

JCF purchased the property a year ago from Cardinal Industries in a $12-million sale-leaseback. The lamination company occupies a 60,000-square-foot manufacturing building on the property, which it has leased from JCF through next year. After Cardinal vacates the building, JCF plans to raze it to make way for further office development.

The company began site work on the property shortly after purchasing the property in April 2008, and began work on the spec office buildings in February. The buildings are expected to be delivered in August, offering space divisible to 14 units as small as 830 square feet. Robertson says JCF has seen significant interest in the properties, which are being marketed for $15 to $17 per square foot net, but has no signed leases to date.

"There's a lot of executive housing and a concentration of wealth in Fox Valley, and we're trying to put something here that those decision-makers could be happy to put their flag on," Robertson says. "Many of those people are getting in their cars everyday and driving to Oak Brook, and we've all seen traffic worse and worse, so we're trying to cut that commute down. There is also a labor pool here they can draw into for their support staff."

Robertson says while the east side of Randall Road is experiencing some softness, occupancy is significantly higher on the west side where this development is located.

"Our company does business all over Chicagoland, and we see in communities everywhere class A office parks," Robertson says. "However, in St. Charles, there really isn't anything with the concentration of office with landscaping and amenities, and that's what we're trying to create here. We've found that Randall Road is a growth corridor in this area."