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Ryan Cos lands $16M financing for Pullman Park spec industrial
Industrial demand has softened, with vacancy at 6.9% in second quarter
Make this one down as only in Chicago — and only on the South Side.
Where else would you find a 10-acre speculative industrial development amid a federally designated national historic park?
That’s what’s in the works in the Pullman neighborhood on the far South Side, where Minneapolis-based Ryan Companies will develop the latest additions to its growing logistics hub, CoStar reported.
It’s the third of four phases planned for the development, in the shadow of the famous railcar manufacturing operation of George Pullman, who built a company town around his plant during America’s Gilded Age of the late 19th century.
Ryan Companies this week said it has gotten $16.3 million in construction financing for a 170,000-square-foot industrial building at 103rd Street and Woodlawn Avenue, its latest industrial project there. The financing amounts to $96 per square foot.
Ryan paid $4.7 million to the non-profit Chicago Neighborhood Initiative to buy the building last month and got the $16.3 million construction loan from Bankers Trust Company, according to Cook County property records.
Terms of the loan were not disclosed.
The developer’s overall plan calls for building the Pullman Crossings industrial park on about 50 acres. The project is part of the 180-acre, mixed-use Pullman Park project under master developer Chicago Neighborhood Initiatives, a nonprofit organization.
The Pullman Park area took shape nearly 150 years ago, with residences and commercial services for employees of the rail-car maker.
The Pullman workers were significant in the labor movement of their era, with a strike in 1894 causing a shutdown of railways and an eventual call for federal troops to force an end to the standoff. President Barack Obama bestowed national monument status on the area in 2015, and its status was later upgraded to Pullman National Historic Park.
Pullman Park has helped draw employers back to an area that saw its economic vitality sapped after Pullman shut down in the 1960s, leading to an exodus of smaller suppliers and other outfits.
The modern industrial park counts among its tenants distribution centers for Amazon and its Whole Foods unit, as well as a soap-manufacturing plant, big-box retailers and a food hall.
The latest phase will include outdoor dining areas, bike racks and 32-foot high dock doors. It’s expected to be finished early next year.
“In an area where building speculative industrial [development] was unheard of, we envisioned a revival of seemingly undevelopable land,” said Kyle Schott, vice president of real estate development at Ryan Companies. “We looked beyond the challenges and invested in the promise of Chicago’s South Side.”
Industrial demand has softened in Chicago. Vacancy hit 6.9 percent in the second quarter, according to Savills. More than 9.3 million square feet of sublease space was available, the most in a decade, as tenants reevaluate their needs.
Development activity has decreased significantly against waning demand, and asking rents averaged $7.40 per square foot in the second quarter.
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