A real estate developer broke ground this week on Chicago’s first multi-story warehouse, showing the continued scarcity of land available for logistics use at a time when inventory levels are soaring and the nation’s DCs are packed nearly full.
Chicago-based Logistics Property Company LLC (LPC) said it has started work on a 1.2 million square foot project set for completion by summer of 2024, located adjacent to a busy interchange in Chicago’s near-north Goose Island neighborhood.
Builders have traditionally constructed sprawling, one-level warehouses in rural areas where land is cheap, labor is plentiful, and interstate highways are nearby. However, that approach has come under pressure lately due to recent trends toward historically low unemployment rates and rising demand for next-day and same-day e-commerce fulfillment.
In an effort to store inventory closer to urban centers and enable quicker package delivery, some retailers and third party logistics providers (3PLs) now find it worthwhile to use dense, multi-floor warehouses.
Other recent examples include a multi-story warehouse in the Bronx, New York City, currently being built by ARCO Design/Build Industrial for completion in the summer of 2023, with space already being leased by sales agent JLL. The “Bronx Logistics Center” offers 585,000 square feet of warehouse space with 32-foot clear heights and direct tractor-trailer access to its two warehouse floors.
Leslie Lanne, executive managing director at JLL, said “Bronx Logistics Center is delivering to the market as the industrial sector in general, and last mile in particular, continue to experience unprecedented pressure from undersupply. With record-breaking demand for last-touch, speed-to-market logistics, we are seeing strong interest for this best-in-class facility.”
And likewise, mega-retailer Amazon.com has leased a three-story DC in the red Hook sector of New York’s Brooklyn borough covering 487,000 square feet that is owned by CBRE Investment Management, which bought the property in June for $330 million from Dov Hertz’s DH Property Holdings and Goldman Sachs Asset Management in a deal brokered by Cushman & Wakefield.
According to LPC, its Chicago project will provide logistics capability by hosting a ground floor with a 36-foot clear height, 28 dock doors, and two drive-in doors. And upstairs, trucks hauling full-sized 53-foot trailers will access separate up and down double-wide ramps to access space with 33-foot clear heights, 28 dock doors, and two drive-in doors. “The completion of this new multi-story development in one of the city’s most central locations will bring numerous economic advantages to Chicago and Illinois,” LPC CEO Jim Martell said in a release.