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NAPERVILLE, IL-Delta Dental of Illinois has announced plans to develop a $15 million office building at 123 Shuman Blvd. The non-profit dental service corporation will build an 85,000-square-foot facility in conjunction with Ryan Cos., which will design, construct, and also become a tenant of the building. Delta will occupy about 63,000 square feet in floors one through three, while Ryan has signed on for the building’s remainder – about 21,000 square feet on the fourth story.

“Delta liked the Naperville address, the visibility and frontage on Interstate 88 and the access and amenities here,” Jim McDonald, director of development with Ryan Cos., tells GlobeSt.com. “Working with Ryan to occupy the building gave Delta the opportunity to own a larger asset. They saw all of those things as positives.”

Ryan will relocate to the new building from their current neighboring offices at 55 Shuman Blvd. for a ten-year lease term. “We are in need of space, and our existing lease is coming due in 2010,” McDonald says. “Delta wanted to own their own building, and we’re flexible about how we develop and don’t need to own our building.”

With the help of CB Richard Ellis, Delta began a market search last summer for new space, including consideration of opportunities to lease, acquire an existing building and construct a new one. The company found current economic conditions made it even more feasible for it to own its own space, which will house 170 employees. The move represents an expansion from the 43,000 square feet Delta currently occupies at 801 Ogden Ave. in Lisle.

EVP Gary Fazzio, SVP Jon Springer and project manager Amy Preston with CB Richard Ellis represented Delta, while EVP David Justh, also of CBRE, represented Ryan Companies in the deal. Under the arrangement, Delta will purchase the property on which its building will be constructed and finance the construction.

Delta’s building will be developed on five acres, which is only a portion of the eight acres Ryan purchased in 2005 for $2.6 million. Ryan retains the remaining three acres of the property and is currently seeking a company interested in a build-to-suit around 40,000 square feet. The property is located in the east-west corridor, where occupancy rates are near 80% and asking lease rates are around $26 per square foot gross, according to Cushman & Wakefield’s year-end office market report.

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