Expanding its development platform, Transwestern announced the formation of an industrial development JV (Ridge Development) with the principals from local firm Ridge Property Trust last week, and we got the details from Chicago’s key players. Ridge CEO Jim Martell, who will lead the venture with president Dennis Rice, tells us the firm focuses on transportation and logistics-based industrial development in gateway cities like Chicago, LA, and Dallas (they have also been active in Mexico since 2004). The Transwestern connection developed after Ridge’s series of closed-end REITs with Prudential Real Estate Investors wound down, Jim says. The JV provides Ridge access to Transwestern's global human capital pool as well as its institutional connections (which have already launched a few deals since the kick off), while offering the Houston-based company access to Ridge's North American industrial development platform.
Ridge is pioneering the time-sensitive transport of fresh fruits and vegetables by rail (98% is currently delivered by truck) and it’s starting with 1,500-acre rail-served RidgePort Logistics Center (rendering above), south of Joliet, Jim says. Served by the BNSF Railway, the first facility will function as a cold storage rail hub, with California product coming in and local dairy products and eggs being shipped out West. Next up is a similar connection between Houston and Chicago, Jim says, and the railroads are finally taking notice of the opportunity. (They should have the trains detour through the drive-thru at McDonald's.) An avid golfer and upland game hunter, Jim is pulling for his alma mater, Wisconsin, in the Final Four.
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Transwestern’s Chicago industrial leader, John Coleman, expects strong local demand for the JV’s development services. Chicago ended the year with a healthy overall vacancy, especially in key sectors like big box distribution facilities (as low as 4%), spurring spec and build-to-suit development (Ridge's bread and butter), he says. There’s also significant leasing and sales activity around 50k SF to 150k SF Class-A and Class-B facilities, which are dominated by local or regional credit firms that make a component part or distribute a small part to the Chicago metro, or a Midwest customer base, John says.
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