CHICAGO—The vacancy rate among Chicago-area industrial properties fell throughout 2013, and the increased demand helped entice many developers into building facilities on a speculative basis. And although Clarius Partners, LLC recently completed a 1.0 million-square-foot speculative bulk warehouse distribution facility at Clarius Park Joliet, most developers have opted for more modest projects.
A joint venture between Panattoni Development Company and LaSalle Investment Management, for example, has just completed the Central DuPage submarket's only new speculative industrial building – a 139,781-square-foot facility at 201 Gary Ave. in Roselle. It sits within the Turnberry Lakes Business Park within walking distance of the Metra rail station and near the Elgin-O'Hare Expressway.
Panattoni has hired Ronald J. Behm, Jeffrey J. Kapcheck and Matthew J. Stauber, all principals with Colliers International | Chicago's Industrial Advisory Group, to lease the property, the third building in a five-building development plan. The same team successfully leased the first two Turnberry speculative buildings which have about 140,000-square-feet. The remaining two, with 152,243-square-feet and 154,110-square-feet, are build-to-suits.
The developers can divide the 201 Gary Ave. building down to 30,000-square-feet and expand the eighteen docks to thirty-six. It has two drive-in doors, 112-car parking, 30' clear ceiling height, and ESFR sprinklers.
"We feel this represents a great opportunity to construct a facility in a size range that is actually in demand," says John Pagliari, partner with Panattoni. "This building is in a 'feeder' location with low taxes, which is a great opportunity for tenants in both the Central DuPage and O'Hare submarkets."
According to Colliers, developers have seven speculative projects underway in the Chicago metropolitan area totaling 2.4 million-square-feet. "The Chicago area industrial vacancy rate fell to 8.7% at year-end 2013 — a significant decline from the 9.51% vacancy rate reported one year ago," researchers note. "This marks the second consecutive quarter that vacancy remained below 9.0%." Furthermore, the Central DuPage market saw a vacancy rate improvement of more than 200 bps from one year ago.
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