OHL Signs for 541K in Romeoville

CHICAGO—OHL has just signed a long-term lease renewal for all 541,123 square feet at 1101 Taylor Rd., the distribution/warehousing facility in suburban Romeoville that the 3PL provider has occupied since 2003. The deal will help keep the market tight and create opportunities for landlords in the metro region.

"Lease terms in the Chicago industrial market continue to trend in favor of landlords in most submarkets,” J.D. Salazar, executive vice president and managing director of Fischer Chicago, tells GlobeSt.com. He teamed with ProVenture Commercial Real Estate to represent OHL. The landlord, New York Life Real Estate Investors, was represented by senior director Jeff Perpich of the firm.

OHL was the first and has remained the only occupant of 1101 Taylor since it was built in 2001. The building features 32' clear ceiling heights, 60 exterior docs and 40 slots for trailer parking.

Although Salazar can't disclose any details from the negotiation, he does say that “tenants with solid credit, like OHL, who are willing to make longer term lease commitments, are able to negotiate rents 5 to 10% below market and generous tenant improvement packages that can exceed market standards by $2 to $3 per square foot."

Salazar points out that in 2015, the Chicago region ended the first quarter with a vacancy rate of just 5.7% for distribution space over 100,000 square feet, which represents a drop of 120 bps from the 2014 year-end vacancy for the same product category. And the average confirmed lease rates for transactions over 100,000 square feet reached $3.87 per-square-foot, per-year, triple-net, in the first quarter of 2015.

Developers have noted the intense demand. Pizzuti, for example, recently completed a 672,100 square-foot speculative facility just down the street at 790 Taylor Rd. in the Pinnacle Business Center. It was the largest vacancy to enter the market during the fourth quarter of 2014, according to Colliers International.