Crain's Chicago Business

Distribution Realty Group to Launch Spec Warehouse Near I-55

A Chicago developer is ready to launch his second spec warehouse in Bolingbrook, looking to capitalize on low vacancy and a dearth of available land along Interstate 55.

James Love, 30, who founded Chicago-based Distribution Realty Group in 2013, plans to start initial work within a month on a 182,875- square-foot warehouse at 990 Veterans Parkway in the southwest suburb. The warehouse will be built on speculation, or without tenants signed.

Distribution Realty and its joint venture partner, East Brunswick, N.J.-based F. Greek Development, on paid $1.1 million this week for the 11.2-acre site just south of I-55, Love said. The acquisition involved assembling three connected parcels owned by two people Love declined to identify.

"It's very difficult to find suitable land," Love said. "It's going to take some elbow grease to find a site in that area."

Work is set to begin on the project as another venture of Distribution Realty nears completion of a 220,000-square-foot warehouse just over a mile north, at Veterans Parkway and Territorial Drive, on the other side of the expressway. That building will be finished in about two weeks, and the developer is in talks with several potential tenants, Love said.

The new project will be the first in the Chicago market by F. Greek, an active industrial developer in its home state and Pennsylvania. The warehouse will be completed by early 2016, Love said.

LOWEST VACANCY SINCE 2001

Its construction will follow 7.6 percent overall industrial vacancy in the Chicago area during the first quarter, the lowest level since 2001, according to Colliers International.

In the I-55 corridor, 1.9 million square feet of spec development is under way or in the planning stages, not even half of the pre-recession level of 5 million square feetin 2007, Love said. Despite strong demand in I-55, traditionally dominated by big-box warehouses leased to large corporations, the lack of available land has kept development in check, Love said.

"There's still some runway to get back to historical numbers," he said.

Distribution Realty plans more developments in the Chicago area and also is interested in Nashville, Tenn., Louisville, Ky., and Indianapolis, Love said.

"We're not really building to sell," he said. "We're building to own a portfolio."