Warehouses replace homes in former Bensenville neighborhood

Just how hot is Chicago’s industrial market? Two developers who razed a residential neighborhood last year have already leased three of the four warehouses they built on the site.

Prologis and ML Realty spent $64 million, or an average of $615,000 per house, to buy a Bensenville neighborhood where public data shows only a handful of homes ever sold for more than $400,000, according to Crain’s. Less than six months later, the project near O’Hare International Airport is paying dividends.

In the two newest deals, UPS leased a 363,000-square-foot warehouse that Prologis is building at Devon and Central avenues, while a Swiss logistics company called Kuehne & Nagel leased a 289,000-square-foot building next door, Crain’s reported, citing people familiar with the matter and CoStar Group.

Apex Logistics, a logistics firm that serviced the e-commerce industry, previously leased a building just under 300,000 square feet. That means only one 307,000-square-foot building is left.

The O’Hare industrial vacancy rate dropped to 2.52 percent at the end of last year, from 2.91 percent in the third quarter, according to Colliers International data cited by Crain’s. It was the lowest vacancy rate among all 22 Chicago submarkets Colliers tracks and below the 5.44 percent overall rate.

Craig Hurvitz, Colliers’ vice president of research for Chicago, previously said Chicago’s all-time low industrial vacancy rate of 5.39 percent, could fall this quarter.

The Bensenville site isn’t Prologis’ only splashy move of the past year. Last March it paid $100 million for one on Goose Island.

[Crain’s]