NILES, IL-After completing its 400,000-sf industrial/distribution redevelopment project at 6420 W. Howard, developers Principal Financial and the Missner Group have leased 50% of the project. Known as the Niles Industrial Center, the distribution property consists of two 200,000-sf spec facilities with units expected to range from 20,000 sf to 100,000 sf.

However, the most recently inked lease, signed by Fibre-Craft Materials Corp. for 169,800 sf, was far more substantial in size than the partnership was anticipating. “There has been a great deal of interest in the project because of the intrigue of a new property, but it has been somewhat slow on leasing front,” Barry Missner, principal of the Missner Group, tells GlobeSt.com. “But because of the size of the lease, the project is already half full. We were expecting by smaller tenant, and we were surprised when we got a bigger user.”

The reason, he found, was that the Niles industrial market lacks comparable inventory. “You don’t have to lease the as much space for the same warehousing facility,” he says, “and we believe we can sell that and some image. This building has image.” For the building’s efficiency and image, users will dish out a 30% premium in rent—a small price to pay for replacing the antiquated facility that formerly occupied the site, says Missner.

The building had been on the market for a couple years, and through price reduction it had become more attractive for reuse. “Developers like us saw this like a plausible redevelopment,” he says. “Through the course of them being unsuccessful to sell, they were willing to reduce purchase price.” After buying the property for $7 million, the company soon began demolition of the existing 1950s warehouse and water tower.

Today, the newly constructed Niles Industrial Center sits on 22 acres of land close Interstates 90 and 94. The property is being marketed to light manufacturing and distribution users. The Missner Group was the general contractor of Niles Industrial Center. Pat Harris of Harris Architects provided architectural services and Bank of America provided the construction financing.

Jim Ward, Brian Carrol and Darryl Silverman with Grubb & Ellis represented Fibre-Craft in its 10-year lease agreement. Missner was represented by Tom Condon, Vern Schultz and Chris Volkert with Colliers Bennett & Kahnweiler. Fibre-Craft’s $2-million-plus office build out will include a glass-enclosed conference room, a 2,500-sf showroom and natural stone reception area. The company is expected to take occupancy in September.

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