Michelin Inks 1.7 MSF Lease at RidgePort Logistics Center in Chicago Area
- May 22, 2014
By Scott Baltic, Contributing Editor
Tire-manufacturing giant Michelin has entered into a build-to-suit agreement under which it will lease 1.7 million square feet of distribution space at the RidgePort Logistics Center in Wilmington, Ill., it was announced yesterday by Ridge Development, the industrial arm of Transwestern Development Co.
The deal makes Michelin the first major tenant at RidgePort, a 1,500-acre, rail-served intermodal park with room for 14 million square feet of industrial, warehousing and logistics buildings, about 40 miles southwest of Chicago.
Construction on the Michelin building will begin “soon,” with delivery expected in mid-2015. The project, according to Ridge, is one of the largest BTS developments in the United States so far this year.
JLL’s Keith Stauber, Dominic Carbonari, Steve Ostrowski and Rich Thompson brokered the lease on behalf of the park’s ownership, a joint venture between Ridge Development and a state pension fund advised by Heitman Financial.
JPMorgan Chase Bank N.A. is providing financing for the construction, for which Ledcor Group is general contractor.
RidgePort is flanked by more than two miles of BNSF mainline frontage to the west and by I-55 to the east. It’s also only a few miles south of the 2,500-acre CenterPoint Intermodal Center/BNSF Logistics Park-Chicago in Elwood, which was developed by CenterPoint Properties on the grounds of the former Joliet Army Ammunition Plant.
Michelin is the world’s No. 2 tire maker, according to Rubber & Plastics News, ranking not far behind Japan’s Bridgestone Corp. and well ahead of No. 3 Goodyear.
Several factors play into the desire by large shippers to take advantage of intermodal rail freight transport, Rich Thompson, managing director, Supply Chain & Logistics Solutions at JLL, told Commercial Property Executive.
These factors include not just direct savings on freight costs, but also sustainability and risk mitigation. In the latter category, Thompson points toward a potential shortage of truck drivers, as the average age in that profession continues to rise.
But these advantages fully accrue only if a shipper is close to rail, he said, which explains the attraction of inland port facilities such as RidgePort.