The Industrial Market Will Not Go Hungry

Industrial food leases (and colored denim) seem to be all the rage these days, but they've been the backbone of the market for the last decade, Lee & Associates of Illinois principal Jim Planey (snapped on a recent trip to Cuba) tells us. Del Monte Foods (repped by Jim and principal Jeff Janda) just expanded its lease (and canned good product line) to 313k SF at an auxiliary warehouse in Rochelle (501 Stewart Road, below). With manufacturing on the decline in Chicago (no more Motorola cell phones made here), food continues to dominate Class-A industrial absorption "whether it's putting the food in the can or putting the can on the grocery shelf," Jim says.

From distributors to retailers to restaurants, recent suburban food leases and build-to-suits are huge and making us hungry. JLL's Robin Stolberg and Kurt Sarbaugh just repped popcorn maker Cornfields in a 159k SF expansion and renewal at its HQ in Waukegan (3898 Sunset Ave). And don't forget Portillo's Food Services buying 214k SF to develop for food preparation in Addison,and Trader Joe's mammoth $30M distribution center in Minooka. With industrial vacancy down 109 bps to 9.51% and net absorption at 13.6M SF in 2012 (according to Colliers), we can guess which tenants will drive the market this year.

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