Industrial Redevelopment Of Allstate Campus Is About To Begin
Dermody Properties has closed on its acquisition of Allstate's former headquarters campus in Glenview and is getting the bulldozer ready for a groundbreaking later this month to turn it into a distribution center.
The redevelopment, dubbed The Logistics Campus, is replacing 2M SF of offices with roughly 3.2M SF of logistics-focused industrial on the 232-acre campus.
Phase 1, which will break ground on Oct. 27, will feature five buildings totaling 1.2M SF. Those buildings are expected to deliver across the second and third quarters of 2023.
The remaining 125 acres will be earmarked for build-to-suit opportunities. Dermody said that acreage could be divided up into another five buildings totaling about 2M SF, go to one 2M SF single-building user or something in between.
“This redevelopment project stands at the intersection of two significant and durable trends — work from home and e-commerce,” Dermody President Douglas Kiersey Jr. said in a press release. “The conversion of the office campus — with buildings dating back to the 1960s and 70s — into modern logistics buildings offers many benefits to the community.”
Dermody said the site should appeal to logistics companies because of its proximity to the high-density and affluent communities in Chicago’s north and northwest suburbs. The Logistics Campus is on Sanders Road, adjacent to Interstate 294, and is about a 10-minute drive to O’Hare International Airport.
“This is the best performing submarket in Chicago in terms of vacancy rate, which is currently the lowest in the entire metro market,” Dermody Midwest Regional Partner Neal Driscoll said in a statement. "Its access to transportation, labor and amenities is unmatched."
The northwest Cook County submarket has 3.1% total industrial vacancy, above the Chicago metro average of 2.8%, according to JLL’s Q3 Chicago Industrial Insights report. Asking rents in the area are $8.36 per SF, well above the metro average of $6.26 per SF and among the top rates in the region.
Allstate hasn't yet designated a new corporate headquarters, but it did purchase a 134K SF downtown Chicago office building in January that may be a contender. The insurance company said its shift from a suburban campus to the space on North Wacker was driven by the new prevalence of remote work among its employees.
How much space Allstate will actually occupy in that building is up in the air. The property was 63% leased at the time of sale, but Allstate could allow those leases to expire over the next three years to take sole occupancy, CoStar reported.