3. Submarket Overview
LEASE ACTIVITY
In the second quarter, Sears committed to an renewal with Heitman for 819,000 square feet of warehouse
space at 1701 W Normantown Road in Romeoville. Also in Romeoville, a large E-commerce user committed
to a new lease with RREEF for a 767,171 square-foot fulfillment center at 1125 Remington Boulevard.
Northern Builders which recently acquired the Mary Kelley Farm site in Bolingbrook secured their first deal on
what is one of the last remaining land tracts in the core I-55 Corridor. Best Buy has agreed to a 615,560
square-foot build-to-suit for lease which will be a new regional distribution center with approximately 60,000
square feet of office buildout to house the company’s “Geek Squad.” In addition, APL Logistics committed to a
new lease for 325,000 square feet at 800 S Veterans Parkway which helped to drive the 520,000 square feet
of positive net absorption posted in the second quarter.
RENTS
Average asking rental currently stand at $5.18 per square foot which represents a $0.43 cent or nine percent
increase from year end as robust tenant demand has pushed vacancy down to 5.3 percent.
SALES AND CONSTRUCTION
The largest trade of the second quarter was TAAssociates’ acquisition of 3-7 Timber Court, Bolingbrook.
Prologis sold this second generation Class A building for just under $56 per square-foot. Molto properties sold
a core three building Class A portfolio totaling 345,862 square feet to Lincoln Property Company. The
properties were fully leased and sold for $34.6 million reflecting a stabilized cap rate of 5.14%. There is
currently over 1.5 million square feet of new product under construction. While vacancy and absorption
remain healthy, the amount of new speculative product in the 100,000 to 300,000 square foot range should
present some attractive opportunities for growing tenants. “Carlow is effectively fully built out. The site on the
brochure (910 Carlow) was ½ preleased by Brauns Express then sold to a user, Universal Laminating. The
site on the north side of Remington was a freezer/cooler BTS for West Liberty Foods. The lot across the
street, 1325 Remington was sold to OPUS and they are building 116K and they have preleased 49K. On track
for a year end delivery.”
ECONOMIC OUTLOOK
According to the Will County Workforce Investment Board, the transportation and warehousing sector reported
a six percent gain in year-over-year employment. However, the manufacturing sector was flat. Larger
occupiers may see continued pressure on their labor force as the Metro Chicago unemployment rate stands at
5.5 percent.
