CHICAGO—The region's industrial sector has seen a steady level of user demand, and the relatively small Elgin submarket has gotten its share. Conor Commercial Real Estate, a member of the McShane Companies, and its partner Globe Corp. recently finished Northwest Pointe, a speculative industrial development in Elgin, and just signed a new lease that brings the facility to 100% occupancy.
Box Partners, LLC has agreed to lease 205,648 square feet of the 342,620 square-foot building at 2501 Galvin Rd. This follows the lease signed last year by Illinois Tool Works, one of Chicagoland's largest and most successful corporations, for 136,972 square-feet.
The rental rate paid by Box Partners, one of the nation's largest wholesalers of packaging, shipping and industrial supplies, was not available, but ITW agreed to pay $5.40 per square-foot, Daniel E. Fogarty Jr., vice president of the Irvine, CA-based Conor, told GlobeSt.com. The average rental rate in the submarket is now $5.04, according to a recent report from Colliers.
Conor-Globe was one of the first developers after the recession to launch a new industrial development in the submarket, and company officials say this is one of the largest speculative buildings in the submarket's history. The distribution facility features 32' clear height, a cross-dock design and modern “big-box” amenities.
When the developers first began planning this project several years ago the vacancy rate around Elgin for top-of-the-line product like this had sunk to a historically low level. “When you pulled out the older, obsolete product, stuff with maybe 18' clear heights, and just looked at product with 24' or more and other modern features, the vacancy rate was under 5%,” Fogarty said. “That dynamic remains.”
Other developers have also sensed opportunity out in Elgin. According to Colliers, five projects totaling 1.2 million square feet are currently underway in the submarket. Duke Realty Corp. is building the largest of these projects, a 757,100 square-foot build-to-suit project on Oak Creek Parkway in Huntley Business Park that Weber-Stephen Products Co. will lease. The vacancy rate for the submarket is currently 11.41%, a steep decline from one year ago when the rate was 14.62%.
Steve Bass, vice president of Lee & Associates, represented Box Partners in the transaction. Conor-Globe was represented by principals Kenneth Franzese and John Cassidy of Lee & Associates.
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