2021 was a record-breaking year for industrial construction in the Chicago region, and an Atlanta-based developer is ready to do its part to sustain that boom in 2022.
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Officials from Ridgeline Property Group told Crain’s Chicago Business that they are ready to begin building what will eventually be 7M SF of new warehouses just south of Interstate 80 in southwest suburban Minooka.
The developers said they were comfortable launching the project, dubbed I-80 Logistics Park, even without tenants lined up, due to the remarkable level of demand for space from companies that need to expand their e-commerce networks.
“It’s pretty incredible what’s going on from a demand standpoint,” Ridgeline CEO Greg Thurman told Crain’s.
2019 and 2020 were hot, but demand accelerated in 2021, according to JLL’s year-end report on the industrial sector. The Chicago region’s overall vacancy rate sank to 3.5% by the end of the year after almost 46M SF of positive absorption, more than the previous two years combined, JLL found.
“Several large corporate occupiers expanded within the market, taking on additional space either for safety stock inventory or to keep up with robust consumer spending,” JLL said. “Some of the biggest household names, Best Buy, LG Electronics, Home Depot, Tesla and Walgreens are all growing, and these commitments indicate the health of the Chicago market.”
And within the warehouse and distribution sector in the I-80 submarket, which is the region’s largest and includes Minooka, the numbers look even more robust. Warehouse and distribution buildings there saw more than 6.1M SF of positive absorption, sinking their vacancy rate to 1.7%, according to JLL.
Ridgeline decided to go big. It will construct a total of five buildings at its Minooka site, with the smallest being 1.1M SF, while the largest will offer more than 2M SF. The company plans to break ground on the 1.1M SF structure in April, a roughly $95M project, and still needs to find a tenant, Crain’s reported.
But securing a lease for a building like that isn’t necessarily daunting these days. Big-box properties of more than 1M SF have been especially popular in the past year, as companies such as Amazon, Unis, Walmart and many other logistics firms seek out spaces that will handle accelerating consumer demand.
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