Exel and JLL‘s plans for a proposed distribution building, and what’s to become the largest spec project in the Chicago area and within the Joliet market, are officially in the works.
In addition to its size of more than 1 million square feet, the building’s proposed $55 million development and construction will set it apart from the bulk distribution centers in the Midwest region. Its 40′ clear height, which is a rarity even in the large Chicago market, appears attractive to tenants such as retail and e-commerce companies. The 480 stalls for auto parking and 270 trailer stalls will allow for speedy product movement throughout the facility at 1151 E. Laraway Road.
When it comes to its location, John Huguenard, international director at JLL, told Chicago Industrial Properties that the I-80 submarket, especially around Joliet, is seeing significant tenant activity given its lack of big box building supply. He explained that second quarter had some standout deals like Whirpool’s 752,410-square-foot lease in Joliet’s Clarius Park, and Amazon’s 474,104-square-foot lease at 401 E. Laraway in Joliet.
“Our research show 16 more tenants in the market competing for handful of large blocks—over 500,000 square feet—across the entire Chicago metro,” Huguenard said.
JLL is seeing a ramp-up in demand for this particular type of Class A bulk distribution product from institutional capital. Huguenard explained that with such a supply/demand imbalance on the capital markets side and few existing assets trading, more and more investors are considering funding spec. He said the associated risk is even more palatable in a market such as Chicago, with the historic low vacancy rate of 7.6 percent.
The firm expects to announce a capital partner and close on the land before year-end. Construction will commence after winter and the building is slated for a third-quarter 2016 delivery.
