Hillwood Plans Largest Spec Development in Chicago
- Sep 08, 2016
By Gail Kalinoski
Chicago—Hillwood, a Perot company based in Dallas, is beginning construction on a 992,640-square-foot distribution center which will be the largest speculative development in the Chicago market.
The firm said this week it closed on the acquisition of an 84.86-acre land site in Joliet, Ill. The property, which will have the capacity to expand to 1.5 million square feet, will be known as Joliet Logistics Park. It will offer tenants visibility from Illinois Route 53 and will have easy access to I-80 and I-55 as well as close proximity to both BNSF and Union Pacific Intermodal operations.
“Joliet has continually been a great market for e-commerce and logistics tenants, primarily because it offers an outstanding labor pool and excellent transportation infrastructure,” Don Schoenheider, Hillwood’s SVP & Midwest market leader, said in a prepared statement.
The state-of-the-art building is expected to be completed by mid-2017. The property will have 116 trailer parking spaces along the dock wall with an additional 150 remote spaces. Up to 222 spaces will be available for auto parking with another 310 available for future expansion.
FCL Builders will be the general contractor and CBRE brokers Traci Payette and John Suerth will be the leasing agents.
Hillwood has developed four other properties totaling nearly 1.3 million square feet over the past 15 months in the Chicago market. It owns numerous industrial sites in the region including Cherry Hill Business Park and Laraway Crossings Business Park, both in Joliet.
“Hillwood’s development activity continues to grow, both in the Chicago market and across the U.S. This property is one of eight, 1 million-square-foot distribution centers developed over the last 18 months and Hillwood currently has more than 8.4 million square feet under construction,” Schoenheider said. “We have had great success by targeting centrally located markets throughout the Midwest and developing quality projects that cater to our customers’ needs.”
Hillwood hired Schoenheider, a former VP at Liberty Property Trust who was responsible for the Chicago and Milwaukee region, in January 2015 to open its first Chicago office and pursue industrial opportunities for the firm in the Midwest.
Schoenheider told Crain’s Chicago Business that the company has begun talking with potential tenants and expects the most interest to come from e-commerce firms as well as food and consumer products companies.
In April, IKEA began building a 1.3 million-square-foot distribution center in Joliet that is slated to be ready by spring 2018. The home furnishings retailer is expected to built a second facility of a similar size in the area as well.
Joliet city officials said in the spring that industrial development in Joliet is booming. Permits for more than 4.4 million square feet of industrial development were issued in 2015 and the trend is expected to continue this year. In addition to Hillwood, city officials said other recent industrial arrivals included Amazon, Whirlpool, Saddle Creek Logistics and Mars.
A recent JLL Chicago industrial report noted that as of early this year the total inventory for the I-80 submarket was 72.3 million square feet with vacancy at 6.7 percent. Total availability in the first quarter was down to 8.2 percent and total net absorption had increased and was at 1.23 million square feet. The average rental rate of $4.26 per square foot was down, due to new supply coming online. Calling the I-80 corridor a “diverse logistics hub,” the report noted that strong occupier demand remains.
Meanwhile, Hillwood continues expanding its industrial assets throughout the U.S. Last week, the company announced it was developing two buildings with a total of 924,325 square feet at Airport Business Park in Smyrna, Tenn., on 75 acres near U.S. Highway 41 and Sam Ridley Parkway. The location offers access to rail and three major interstate systems.
Kurt Nelson, Hillwood’s SVP & mid-south region market leader, said the Nashville and Smyrna markets are booming.
“Population growth and logistics are among the many reasons that 18-hour cites are emerging as big investment opportunities,” Nelson said in a prepared statement. “This property marks our expansion and continued investment in the Nashville market.”
The company’s Memphis office, led by Nelson, will oversee the development. ProVenture’s Brian Camp is the leasing agent.