Amazon Nearing Deal for First Chicago Vertical Warehouse

Amazon is reportedly closing in on the vacant vertical warehouse at 1237 West Division Street just west of Goose Island in Chicago.

The warehouse has never had a tenant or owner other than its developer. It has sat empty since it was completed in 2024, and its developers, Logistics Property, listed the building in October. Now according to Crain’s, Amazon is expected to buy the building at a fraction of what it cost to build it, adding that billionaire Jeff Bezos’s company is expected to cover whatever amount is still outstanding on Logistics Property’s $150 million construction loan. Logistics Property also paid $55 million for the 11.5 acres the land sits on.

The warehouse was the first of its kind in the Midwest. It spans nearly 1.2 million square feet near Goose Island, a stone’s throw away from the Kennedy Expressway. 571,000 square feet of that total is warehouse space, and its parking decks hold either 1,590 cars or 763 vans. The building can also hold larger vehicles and has more distribution efficiency due to its design. The verticality of the building is rare in the more central parts of the United States. It’s popular in Europe and Asia, but has not been adopted outside of coastal areas in America.

Chicago hasn’t seen many industrial developers take losses on warehouses, vacancies across the city for that kind of property have seen record lows since the pandemic, according to the outlet. Developing the property took more time than the typical one story type of warehouse the area is used to, and by the time it was done, there was a fall off in warehouse demand. The rent is allegedly higher at this style of warehouse as well.

Previously, the developers told the outlet that the property offers flexibility for those who want to stay in the Chicago area for the long haul. They also said the facility has the capability to support anywhere from 600 to 800 permanent jobs.

— Hunter Cooke