IKEA to Build 1st of 2 Illinois Distribution Centers as Part of Chicagoland Project Boom

IKEA's future Joliet, Ill., distribution center is one of many industrial projects planned to take shape in the Windy City MSA this year.
IKEA distribution center in Tacoma, Wash.

IKEA distribution center in Tacoma, Wash., also designed by Gray Construction

Chicago—A 1.3 million-square-foot distribution center for home furnishings retailer IKEA is being built in Joliet, Ill., one of nearly $3.8 billion in industrial capital and maintenance projects in the Chicagoland area planned for this year.

Industrial Info Resources, which is planning a free Market Outlook & Networking Event May 11 at the Hyatt Regency McCormick Place in Chicago, included the $80 million IKEA distribution center as one of the many projects expected to be built in the 14-county Chicago-Naperville-Elgin MSA between May and April 2017. The panel discussion will cover industries including industrial manufacturing, power generation, oil and gas, food and beverage and chemical processing.

One of the largest projects highlighted by Industrial Info Resources of Sugarland, Texas, is Chicago Transit Authority’s Red Line commuter rail extension, which is expected to begin later this year or early in 2017. The $240 million project will extend the train line more than 5 miles between 95th and 130th streets with three new intermediate stops and a terminal at 130th Street, according to the report. It is expected to be completed by mid-2018.

LyondellBasell Industries is expected to make about $219 million in improvements at its Morris, Ill., plant, placing it second in terms of project value in the chemical processing industry portion of the report.

Construction underway on future IKEA distribution center in Joliet, Ill.

Construction underway on future IKEA distribution center in Joliet, Ill.

The IKEA distribution center is drawing attention in the region because it will be one of two giant warehouse facilities the retailer is erecting at the Laraway Crossings Business Park, 48 miles southwest of Chicago. With nearly 1,000 suppliers in 50 countries, IKEA transports products to its stores through regional distribution centers. The Joliet facilities will serve the Midwest and complement the current distribution network in the United States, which includes two fulfillment centers on the West Coast and three on the East Coast.

“As we become even more accessible nationwide by opening new stores, this distribution center will help meet the home furnishing needs of Midwestern customers,” Lars Petersson, IKEA U.S. president, said in a prepared statement.

The distribution center, being designed and built by Gray Construction, is expected to be ready by spring 2018. Gray, a nationally ranked engineering, architecture and construction firm, has built more than 250 distribution centers across the U.S., including several for IKEA.

No details were released on the second warehouse, but IKEA has said it would be of similar size to the one under construction now.

The project is expected to add construction jobs as well as about 100 permanent positions at the distribution center.

City officials said industrial development is growing in Joliet, where permits were issued for more than 4.4 million square feet of industrial development in 2015. The trend is expected to continue throughout this year. A city press release noted that recent industrial arrivals in Joliet include Amazon, Whirlpool, Saddle Creek Logistics, Hillwood and Mars.

“We welcome IKEA to Joliet and thank them for recognizing the value that our marketplace affords,” Mayor Bob O’Dekirk said in a prepared statement. “This project is the first big announcement for what is shaping up to be another great construction year in Joliet.”