Dermody Properties Signs Pepsi to Chicago Logistics Complex

Dermody Properties scored a major tenant for its ambitious logistics campus in Glenview.

A bottling division of Pepsi Beverages will lease a 351,500-square-foot built-to-suit warehouse, the Chicago Tribune reported. The project is in the Logistics Campus, which is Dermody’s redevelopment of the former Allstate headquarters at 3075 Sanders Road.

Dermody bought the 232-acre site for $232 million in 2022, with plans to build one of the largest urban logistics developments in the U.S. The 10-building, 3.2 million-square-foot complex will amount to a $500 million project, but finding tenants is taking some time.

The Pepsi facility is being built at the far southern end of the campus in the second phase of the development. The five-building first phase is mostly vacant. Four of those five buildings comprise 700,000 square feet up for lease.

Dental equipment manufacturer HuFriedyGroup leased one of the buildings, spanning 326,300 square feet, in March, though a target date for moving in has not been determined.

That lease followed an earlier agreement with California-based Upside Foods, which planned to build but then postponed a 187,000-square-foot cultivated-meat facility at the campus, choosing to focus on its California operations instead.

The vacancy rate in greater Chicago’s industrial market crept up 6.3 percent year-over-year in the second quarter, and construction was down 24 percent, according to Avison Young. The Pepsi warehouse is the only industrial project in development in Cook County, and its lease begins in February.

Office-to-industrial redevelopment, especially for data centers, is becoming a trend in the Chicago suburbs. Karis Critical, for example, is planning a two-building data-center complex on the site of the former Alcatel‑Lucent office site in Naperville.

And Compass Datacenters is redeveloping the 2.4 million-square-foot former Sears headquarters in Hoffman Estates into a data-center complex.

—Eric Weilbacher