Carleton Riser’s Transwestern landed a lease with a Coca-Cola bottling company for half its 500,000-square-foot speculative industrial project in the Chicago area.
The Houston-based developer company struck a deal with Reyes Coca-Cola Bottling to move its operations in the western suburb of St. Charles north to a new 40-acre, $90 million two-building complex in West Dundee, the Daily Herald reported.
Reyes is taking up 250,000 square feet, an entire warehouse, to relocate into the property, on a slice of the 160-acre Canterfield Corporate Campus along Route 31 north of Interstate 90. Transwestern bought a portion from HLC Partners, the owner of the full 160-acre site, with plans to build two warehouses totaling 500,000 square feet while the other half of Transwestern’s project is still unclaimed and being built on spec.
Transwestern is far from alone in taking its approach. Industrial builders set a record earlier this year by putting 44 buildings with 23.7 million square feet into the Chicago-area development pipeline, TRD reported. They were motivated by the market’s record-low supply, as the vacancy rate for buildings of at least 200,000 square feet dropped to 2.6 percent, driving up rents.
Tenants have reacted swiftly to developers’ announcements of new projects. The second quarter was the first time in three years that vacancies rose in recently built speculative industrial buildings, as occupiers caught their first chance of the pandemic to shop around without losing their place in line. The vacancy rate rose 30 basis points during the quarter to 7.3 percent, Colliers found. A basis point is a hundredth of a percentage point.
West Dundee officials are hopeful Transwestern’s project will catalyze more development of the larger Canterfield business park. Village leaders approved a tax increment financing agreement for Canterfield, which provides up to $5.6 million in incentives for the developer to help cover the cost of public infrastructure improvements required for its project, allowing the village to provide a rebate on a portion of the increase in property value resulting from the construction.
— Sam Lounsberry
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