Industrial giant 3M signed a 12-year lease renewal at a three-building distribution center in Illinois, marking one of the largest industrial lease transactions in the state this quarter.
The lease at the 410,00-square-foot building located at 1211 Fairview Drive in DeKalb, 60 miles west of Chicago, will start in August 2022 when the current agreement expires, according to the landlord, Modiv, a Newport Beach, California-based commercial real estate crowdfunding platform.
The industrial conglomerate’s long-term lease comes as the pandemic-fueled e-commerce market is rapidly expanding, pushing vacancy rates for large warehouses down to a record-low of 4.4 percent in the third quarter. Developers are looking to capitalize, with around 27.8 million square feet of industrial space in the pipeline — more than double the space built in 2020.
There were five deals over 500,000 square feet signed in the third quarter, led by Amazon’s 1.2 million-square-foot lease commitment in Huntley for a build-to-suit development, according to NAI Hiffman. U.S. Medical Glove inked the largest lease in the second quarter for nearly 1 million square feet at a former Caterpillar manufacturing plant in Montgomery, about 40 miles southwest of Chicago.
The distribution center, built in 2007 as a build-to-suit industrial property, is one of the three buildings that serves to store and export 3M products across the world, to markets including Latin America, Africa and the Middle East. Two other 3M warehouses are located next to the distribution center at Fairview Drive.
The property landlord Modiv owns a mix of 38 industrial, office and retail buildings across the country including California, Nevada and Texas. This week, the company announced plans to go public next year.