While spec industrial development these days is centered on giant facilities in the suburbs and around O’Hare, one contrarian developer is finding success building smaller warehouses inside Chicago's borders and bringing The City That Works back to the neighborhoods.

Dayton Street Partners founder Howard Wedren (left, with Wrightwood Capital’s Bruce Cohen and Pine Tree Commercial Realty’s Peter Borzak) has been busy in recent months building and rehabbing small industrial spaces in niche submarkets. Howard says there's a market for smaller industrial within the city limits other developers are missing by focusing on office, multifamily and mixed-use. Howard adds these deals aren't easy to come by, but he's been successful by doing his due diligence with site selection. Dayton Street finds sites with ease of access to expressways and state highways, overcoming what he calls "geo-technical and environmental issues." Building and repositioning to suit allows Dayton Street to target smaller companies that don't need the large footprint developers are building to target tenants with suburban warehouses.

Howard says he was inspired by the success of Halsted Pershing Business Center (shown) at 815 W Pershing in Bridgeport’s Stockyards Industrial Park. This 104k SF building was one of the first spec industrial buildings built in Chicago in 20 years when it was delivered in 2009. Dayton Street sold the building to Alliance Capital Partners last June for $10.7M.

Howard says Dayton Street has two more projects in the works near the stockyards. A 50k SF warehouse at 920 W Pershing (pictured) was transformed into a state-of-the-art cold storage facility with all new electrical and loading docks. Dayton Street will also break ground on a new 55k SF warehouse at Halsted and 43rd streets in October.

Howard says he’s very excited about building a 40k SF warehouse at 4150 N Knox. He says the North Side is a tight market with very little land to satisfy demand, and that industrial-zoned space is even more rare. Howard adds this building, located a half-block from I-90, would be ideal for food, distribution or light manufacturing companies looking for direct access to the city and expressways. The building will feature 30-foot clear heights, four docks, two drive-in docks and T8 lighting.

Dayton Street is even entering the loft office game. Howard says the group will deliver a fully redeveloped, 40k SF loft office space at 2137 W Walnut in December. The $1M rehab features new steel staircases, lighting and electrical, and an ADA-compliant elevator. Howard says the building’s location west of the red-hot Fulton Market will be a draw for companies looking to be near the area, but with significantly lower rents.