E-commerce Firms See Explosive Growth

CHICAGO—Swap.com, a fast-growing online retailer, has just signed a 361,000 square foot lease at 850 Veteran's Parkway in suburban Bolingbrook, marking its second major expansion since its founding in 2013. At its previous location, Swap.com, which offers a selection of pre-owned baby, kid's, maternity and women's apparel and accessories, occupied just 66,000 square feet.

“It's indicative of what we're seeing with e-commerce firms,” Jason West, an industrial specialist based in Cushman & Wakefield's Rosemont office, tells GlobeSt.com. Swap.com began as an operation with 15 employees but now has a staff of 100 handling an inventory of more than 340,000 items. “This lease represents positive net absorption of approximately 300,000 square feet within the I-55 industrial submarket and will push down the vacancy rate by nearly 40 bps.”

“It's really challenging to get these real estate deals done,” he adds. West assisted Swap.com in securing its initial lease as well as this new expansion. It is the fifth e-commerce lease completed by West's team this year. The e-commerce firms often want short-term leases because they anticipate rapid growth that could require a series of quick moves. But landlords, of course, always prefer the stability of long-term leases. “There is a point of contention there.”

To solve that possible difficulty for Swap.com, two years ago Cushman & Wakefield “strategically selected a building owned by Prologis in Bolingbrook,” West says. “The decision to partner with Prologis, which has the largest industrial portfolio in the Chicago metro area, turned out to be a great choice when our client's growth accelerated beyond expectation. Prologis recently acquired 850 Veteran's Parkway, and we structured a transaction that allowed Swap.com to relocate prior to the expiration of its initial lease. The company is now well positioned for continued progress.”

That initial lease was for three years, he adds, and the current one is for five years.

Jim Estus of Colliers International represented Prologis in the 850 Veteran's Parkway transaction. Located on the north side of I-55 between Rte. 53 and Weber Rd., the asset provides 30' clear ceilings, ESFR sprinklers, heavy power, 37 exterior loading docks, four drive-in doors, and parking for 224 cars and 321 trailers.

“The parking at this facility is a unique feature that is unmatched within the submarket for buildings of similar size,” West said. “The trailer parking can be converted to car parking, which can accommodate more than 800 cars on site. This was an important consideration for Swap.com, which expects its workforce to evolve to several hundred employees over the next few years.”