By: Ryan Ori, Crain’s Chicago Business – Ridge Development plans to build a 271,200-square-foot warehouse in Bartlett, following one of the best years ever for local industrial landlords. Chicago-based Ridge and investment partner Diamond Realty Investments plan to break ground this month on the warehouse at 1331-1337 Schiferl Road in Brewster Creek Business Park in the western suburb, according to Ridge.
The Ridge venture is building the warehouse on speculation, or spec, without any commitments from tenants, and it will be completed in September, said Ridge Senior Vice President Darcie Fankhauser. Ridge hopes to fill the building with one or two tenants, but it can accommodate as many as four, she said. “There’s a lack of supply from 100,000 to 300,000 square feet in that area, north DuPage County,” Fankhauser said. “We’ve been seeing a decent amount of interest considering it’s early in the year and we haven’t even started digging.” Diamond is the real estate investment arm of Japan’s Mitsubishi Corp. Ridge is the industrial development arm of Houston-based Transwestern Development. This is their first project together. The venture bought the 14.2-acre development site from Elmhurst-Chicago Stone for almost $2.6 million on Jan. 19, according to DuPage County records. Brewster Creek Business Park is just east of State Route 59, accessible to interstates 290 and 355. Building on spec is riskier than developing a building that has been pre-leased, but it’s not uncommon when it comes to industrial development, especially in the current market. The Chicago-area industrial vacancy rate fell to its lowest level since 2001 at the end of 2015. In another sign of the industrial market’s strength, sales volume in the area topped $4 billion in 2015, an all-time high, according to New York-based research firm Real Capital Analytics. Developers completed 8.4 million square feet of spec industrial projects in last year, the most since spec development totaled 13.4 million square feet in 2008, according to Seattle-based Colliers International. “Vacancy is the lowest it’s been in years, which helps support the numbers for doing new development,” Fankhauser said. “Developers have been cognizant about getting too far out ahead of their skis. Development in this cycle has been pretty disciplined, and demand has been strong.” Ridge already has capitalized on strong industrial demand, completing a 1.7 million-square-foot facility for French tire manufacturer Michelin last year in Wilmington, near Joliet. It was the largest build-to-suit industrial development in the Chicago area since 2006. It is also seeking tenants to fill about 750,000 square feet it is developing on spec in Wilmington, Fankhauser said.