Dermody Properties is taking on another office-to-industrial conversion in the northern suburbs, while Bridge Industrial is scaling back its similar plans in Deerfield.
Nevada-based Dermody aims to convert the Caremark Towers on Sanders Road into a 300,000-square-foot industrial facility, Crain’s reported. The 18-acre site is just north of the 232-acre former Allstate campus in Glenview, which Dermody is transforming into a 10-building, 3.2 million-square-foot logistics park.
The empty former CVS Caremark office property at 2211 Sanders fetched $2.3 million at auction late last year from Schaumburg-based DTS Properties, public records show. And the mostly vacant office building next door at 2215 Sanders was sold near the same time for $2.2 million to Michigan-based Farbman Group, which also bought a West Loop office building at 600 West Jackson Street last year for a discount. Both those companies then reached out to the industrial developer about its interest in buying the site, Dermody’s Neal Driscoll said.
In Deerfield, meanwhile, Bridge Industrial has proposed a two-building, 825,700-square-foot facility along Interstate 294, down from its original proposal of a 1.1 million-square-foot development.
For months, Bridge has been wanting to tear down the 10-building Baxter International office campus at the site to make way for a warehouse project, but the developer has received fervent pushback from local residents, who don’t want the congestion, noise and pollution that sometimes occurs with industrial projects.
Bridge ultimately withdrew its proposal with the Village of Deerfield. Now, it’s pursuing the office-to-industrial play through Lake County instead. However, county officials said the firm still needs to work with Deerfield officials to turn its vision into reality.
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Baxter plans to sell the property to Bridge as the company embraces the remote-work movement, an increasingly common trend since the pandemic hit. The revised plan includes a 645,700-square-foot, single-tenant industrial building and a 180,000-square-foot, multi-tenant building designed for various uses, such as office space, warehousing, distribution, assembly and light manufacturing, the outlet reported.
The projects in both suburbs reflect a booming industrial sector and a struggling office sector. Remote work has driven office vacancy rates up to a record high in Chicagoland, and hiked interest rates have compounded the issue as they continue to push property values down.
There’s been an increased demand for warehouse space in recent years, though. The pandemic sparked an increase of E-commerce, building more demand for industrial spaces.
— Quinn Donoghue