Last week, the Chicago Plan Commission approved a plan by Hilco Redevelopment Partners to construct a 1-million-square-foot distribution center in the Little Village neighborhood. The new project joins a slate of other projects as developers attempt to meet demand for last-mile capabilities close to the CBD.
Located at 35th Street and Pulaski Road along the Chicago Sanitary and Ship Canal, the site is home to the Crawford Power Generating Station, a coal-fired power plant that was built in 1925 and operated until its decommissioning in 2012. Hilco, a unit of Northbrook, Illinois-based Hilco Global, acquired the property from NRG Energy last December for $12.25 million.
Hilco will undertake comprehensive remediation of the 70-acre industrial site, a process that could take anywhere from 14 to 24 months, depending on site conditions. Once the site has been safely abated of any potentially hazardous materials, the developers will begin demolition of the shuttered power plant.
In its place, a $100 million, 1,060,000-square-foot warehouse known as Exchange 55—after Interstate 55 just across the canal—will go up. As e-commerce continues to hum along, the facility will be well-positioned as a distribution center, attractive to online retailers or third party distributors looking to reach Chicago’s urban core.
Representatives from Hilco said that they have received interest from potential tenants. However, the demand for last-mile distribution is strong enough that they will construct the facility on spec as soon as site remediation is complete, regardless of whether or not any tenants are in place.
“What the market is looking for is a very strong labor force, which Little Village offers, and the ability to be competitive for last-mile logistics,” said Roberto Perez, Hilco president and managing partner. “We believe if we build it, they will come.”
Hilco estimates that Exchange 55 will require 360 construction jobs and will ultimately create 178 permanent warehouse jobs. The developer wants to open the facility as early as the first quarter of 2020. The new building will feature 188 loading docks and 225 parking spaces. Solar panels will also be installed atop the 52-foot-high structure.
A trend for last-mile
Assuming it receives zoning and City Council approval, Exchange 55 will be just the latest in a string of industrial developments on Chicago’s near Southwest Side. Once the site of massive manufacturing facilities, abattoirs and cross-national train switching yards, the area has seen a resurgence as an e-commerce-supported distribution hub.
Two and a half miles away, a joint venture between MAT Limited Partnership and institutional investors advised by J.P. Morgan Asset Management are developing Marina Crossings, a 633,000-square-foot spec facility near the site of the original Central Manufacturing District.
Scheduled for completion this year, Marina Crossings will offer 32-foot ceilings, cross-docking, precast construction and plenty of expandable car and trailer parking on a 35-acre, rail-served property. Cushman & Wakefield are representing the landlord, tasked with attracting new tenants to the property.
Having outgrown its warehouse at 3000 South Ashland, Banner Wholesale Grocers recently announced that they will soon move into a new 75,000-square-foot facility. The family-owned and independent grocer, which has operated in Chicago since 1926, tapped Meridian Design Build to construct the building.
Features include a cash-and-carry, one-stop shopping experience at the building’s front, as well as an on-site taqueria. But walk-in customers are far from the grocers’ primary business; the close proximity to the I-55 Damen exit allows Banner to service wholesale products to not just the Chicago area, but the entire Midwest.
In July, Venture One Real Estate and USAA Real Estate broke ground on a new project, Rockwell Logistics Center. The modern facility will offer 32-foot clear height, precast construction and 205-foot loading courts able to accommodate excess trailer or car parking. Lee & Associates are marketing the center, which is scheduled for delivery the first quarter of 2019.
The 174,000-square-foot, last mile urban logistics facility will be located at 2545 W. 24th Street. Less than 1.5 miles from I-55 and less than five miles from the Chicago Loop, it will offer immediate access to one of the densest population centers in the country—an enticing feature in the age of e-commerce.
