The I-55 Corridor consists of over 72.5million square feet of industrial inventory greater than 10,000 square feet in building size. It is one of eighteen industrial submarkets tracked by Grubb & Ellis. Cities which make up this market include: Bolingbrook, Burr Ridge, Darien, Lemont, Plainfield, Romeoville, Willowbrook and Woodridge.
Vacancy Rate & Absorption
The vacancy rate in the I-55 Corridor declined by 110 basis points to 8.5 percent this quarter. Absorption was in the positive at 836,741 square feet as compared to last quarter’s negative (-283,692) square feet. Much of the positive absorption reported this quarter was largely due to four separate tenant transactions, each over 100,000 square feet. Samsung moved into its 650,000 square feet of space at 160 Southcreek Parkway, while Hub One Logistics took occupancy of 336,000 square feet at 1257 N Schmidt Road in Romeoville. Richoh Americas Corporation and TF Cable also absorbed over 367,600 square feet combined.
Asking Lease Rates
Average asking rates for warehouse and industrial distribution product fell by six and a half percent to $3.54 per square foot net. R&D/flex asking rents fell by one and a half percent to $10.44 per square foot net.
Presently, there is one project under construction in the I-55 Corridor submarket. Edward Don & Company broke ground on a 20-acre parcel at the Union Pointe business park for the construction of its new 362,500-square-foot corporate headquarters and logistics center. The new build-to-suit will be located at the recently launched Union Pointe business park, situated at the intersection of I-355 and I-55 in Woodridge. Edward Don & Company is a nationwide distributor of foodservice equipment and supplies. The family-owned firm, celebrating its 90th year in business, will relocate its operations and nearly 400 employees from its current facility to their new headquarters in the Fall of 2012. The contemporary facility will feature 55,000 square feet of office space, 32’ clear height, 38 external docks, two drive-in doors and parking to accommodate 20 trailers and 380 vehicles. The two-story office and industrial building incorporates a modern ESFR sprinkler system and numerous sustainable features such as T-5 lighting throughout the warehouse. The State of Illinois, County of DuPage and Village of Woodridge reached agreements that enabled Edward Don & Company to more appropriately spread the costs of the relocation, new construction and increased capital expenditures across a 20-year lease commitment in Woodridge." Grubb’s own, Brian Carroll and James Cummings, represented the owners, McShane Development Company and Gallagher and Henry in the deal. Associated Bank is providing the financing for the project. The design/build team of McShane Construction Company and Ware Malcomb Architects has been selected to provide the design and construction services for the project.
I-55 CorridorMarket Activity
The I-55 submarket is going strong with substantially sized moves in recent months. Samsung vacated its space at 1000 Veterans Parkway in Bolingbrook and took occupancy of its new 650,000 square feet of space at the LEED Gold certified, Pinnacle XXIII building located at 160 Southcreek Parkway in Romeoville. Ricoh Americas Corporation leased a 261,550-square-foot industrial building at 254 Internationale Parkway in Bolingbrook. On the sales side, investor confidence has been improving in recent quarters. The largest deal in the corridor this year has been the purchase of 740 ProLogis Parkway in Romeoville by LaSalle Investment Partners.
I-55 Corridor Market Activity (continued)
The Northstar Lottery Group just doubled its space at 586 Territorial Dr in Bolingbrook. The warehouse houses machines being repaired or sold. The landlord is Mars Equities. Increased demand and jackpots meant the group that recently took over the state lottery requires more space.Distribution 2000 Inc, a third-party public warehouseand distribution firmSignificant Deal Transactions – 11Q4
Lessee/Buyer / Size (Sq Ft) / Address / Type / Rate/Price
LaSalle Investment Mangmnt / 648,960 / 160 Southcreek Pkwy, Romeoville / Sale / $30 M
The Scotts Company / 591,750 / 1601 Remington Blvd, Bolingbrook / Lease / $ nnn
Allianz portfolio sale / 499,200 / 1053 Schmidt Rd, Romeoville / Sale / $18.5 M
Synnex Corporation / 450,900 / 1160-1180 W Remington Blvd, Romeoville / Sale / $15.5 M
Edward Don & Company BTS* / 362,500 / 9801 Adam Don Pkwy, Woodridge / BTS Lease / $4.65 nnn
Distribution 2000 Inc / 236,880 / 1165 Crossroads Pkwy, Romeoville / Lease / $2.63 n
Schwartz Paper Company / 213,470 / 1450 Remington Rd, Bolingbrook / Lease Renewal / $3.40 n
Kee Action Sports / 75,600 / 3-7 Timber Ct, Bolingbrook / Lease Renewal / $3.25 n
Tyco Valves & Controls / 40,180 / 605 Territorial Dr, Bolingbrook / Lease / $4.75 gross
*Represents a Grubb & Ellis transaction
offering food grade storage, leased about 236,000 square feet at 1165 Crossroads Parkway in Romeoville. The new lease is a relocation and consolidation from two locations,which increases the firm’s total square footage by 61,000 square feet.The firm, whose clients are food and beverage companies, plans to move early next year. The deal makes the 471,500-square-foot building half leased. The one-story, 471,500-square-foot industrial warehouse building was built in 2004. It has a 30-foot clear ceiling height, 48 exterior docks and two drive-in doors. The building is located one-half mile from the interchange at Interstate 55 and Weber Road and has good visibly from thehighway.
The available rate is the amount of space available for lease divided by the inventory. The I-55 Corridor area availability rate currently stands at 13.9 percent, a 40-basis point increase from third quarter.
Historical Unemployment Rates
The US Bureau of Labor Statistics (BLS) released preliminary November 2011 unemployment rates for all Metropolitan Statistical Areas (MSAs). The unemployment rate measures the percentage of the local workforce that reports itself as being out of work, information that the government collects by surveying households.In November, an estimated 465,700 people in the Chicago metro area were unemployed out of a labor force of approximately 4.85 million (compared to 4.83 million in October), resulting in a preliminary unemployment rate of 9.6% (not seasonally adjusted). The November rate was unchanged from last month, but up from 9.0% in November 2010.Nonfarm employment, a separate measure based on data collected directly from employers about the number of jobs they are responsible for, suggests the Chicago MSA gained 4,000 nonfarm jobs between October and November 2011, bringing total nonfarm employment to approximately 4.32 million.11 of the 15 large metros illustrated in the chart below experienced a decrease in unemployment rates from October to November before seasonal adjustment; Chicago’s rate did not change.
- Lease renewals will rise as landlords are agreeing to provide tenant improvement allowances, as well as upgrades and attractive rent structures to existing tenants.
- LEED certification and green initiatives are predicted to grow due to end-user cost benefits as well as the preservation of future facility longevity.
The information provided in this submarket report was obtained through sources deemed as reliable; however,
the authenticity and data cannot be guaranteed in full. This information is subject to change as new data
becomes available about said submarket. Information is compiled by Grubb & Ellis Research & Client Services.