Saddle Creek Takes 1.1M SF in Build-to-Suit

CHICAGO—Saddle Creek Logistics has decided to lease a new 1,114,575 square-foot build-to-suit distribution facility that sits on 60 acres at CenterPoint Intermodal Center in suburban Joliet. The transaction is the largest industrial transaction and build-to-suit year-to-date in the Midwest region of the US, according to officials from Newmark Grubb Knight Frank, which represented Saddle Creek in the relocation.

The deal is also “the second largest industrial transaction in the US so far in 2015,” Geoffrey Kasselman, executive managing director and head of NGKF's national industrial practice, tells GlobeSt.com. “In fact, the deal is not only representative of a robust market, but also of Chicago's strategic importance as a regional and national hub for the distribution and logistics industry.”

Saddle Creek, a third-party logistics company, will relocate to CIC from a 590,000 square-foot facility at 21051 W. Walter Strawn Dr. in Elwood, IL, nearly doubling their space. It plans to move by February, 2016.

Kasselman did not work on this particular deal, but says that many 3PLs are expanding in a similar fashion. Their clients need more space, especially in dense urban cores like Chicago, Dallas and New Jersey, in order to satisfy consumer demand for same-day delivery of a wide variety of products. And even though developers have begun breaking ground on a number of specs and build-to-suits, the almost-complete lack of new building from 2008 to 2013 left a lot of pent-up demand. “Many people are rethinking what their long-term needs are,” and instead of risking the possibility that new development will fall off again sometime in the future, have decided to “grab it now when they can. Many users are doing that kind of feasibility study.”

Founded in 1966, the Lakeland, FL-based Saddle Creek has 41 locations nationwide and provides warehousing, transportation, packaging and fulfillment services. As reported in GlobeSt.com, the firm has completed other recent expansions. A few weeks ago, it agreed to completely occupy the new 673 building at Gateway Commerce Center in the Metro East submarket of St. Louis. The company plans to use the 673,137 square-foot speculative building for a client that until now did not have a distribution operation in the St. Louis area.

NGKF's senior managing director Jack Cozzie represented Saddle Creek in the Joliet transaction along with senior vice president Ladson Montgomery of Newmark Grubb Phoenix Realty Group. The partners assisted in Saddle Creek's site selection analysis, and say building at CIC made sense due to the site's proximity to the interstate highway network and available square footage.

“They helped us to create an opportunity that provides for our current operations as well as future expansion at CIC,” says Doug Blatchford, an executive with Saddle Creek, “and they did so in a way that maximizes the value of our real estate assets.”

The CIC in Joliet offers direct access to the Union Pacific Joliet Intermodal Terminal and the BNSF Logistics Park Chicago. Saddle Creek's facility will feature 32' clear ceilings, 132 dock doors, four drive-in doors, 328 trailer stalls as well as 15,000 square feet of office space. Construction of the $43 million project will create about 250 jobs, according to NGKF, and Saddle Creek will base 200 permanent workers in the warehouse. NAI Hiffman executive vice presidents Dan Leahy and Adam Roth represented CenterPoint in the transaction.

“CenterPoint deserves a lot of credit for having the vision to secure all of land out there years ago,” Kasselman says, “and recognize what intermodal transportation would become.”