Georgia Pacific has signed a long-term lease for 696,540 square feet at 702 Commerce Center Drive in University Park. This would be the largest new lease in the Chicago area so far this year.
Lee & Associates represented the landlord and Colliers International acted as the tenant representative in the transaction.
The Commerce Center Business Park has now seen two large deals take place in the past 24 months, as Clorox initiated a 1.35-million-square-foot build-to-suit at the park last year.
“This has been one of the more successful parks in the last 24 months,” says Brain Vanosky, principal at Lee & Associates. “We are thrilled that we have completed that amount of leasing.”
Located in the I-57 corridor, the Commerce Center Business Park was completed in 2006. Activity in the I-57 corridor has been flat, with a vacancy rate that remained stagnant at 24.5 percent in the third quarter. Year-to-date absorption has been a negative 96,000 square feet.
This new lease will be a boon to the area and should drive down the overall vacancy rate considerably.
Vanosky, who worked with Jeff Janda and Justin Fierz of Lee & Associates, says that one of the big selling points for the area is that it lies in a TIF district. Users receive a 75 percent rebate on real estate taxes with the current TIF.
Georgia Pacific is currently doing some improvements on the facility, but Vanosky says that the tenant should move in early next year.
The overall Chicago market has experienced a steady recovery for the past year as the overall vacancy rate is around 10.6 percent, according to numbers from NAI Hiffman.
Vanosky says that large users are driving this recent activity.
“I think the larger users are still very active,” says Vanosky. “That portion of the market has stabilized. Activity with mid-sized and smaller deals is still lacking.”
A phone call to USAA Real Estate was not returned. Colliers International representatives were unable to comment on the deal.