by Dan Rafter
Opus Group is making a big investment in Chicago’s Interstate-55 corridor, building a 111,345-square-foot speculative industrial building in the Paragon Business Park in suburban Romeoville.
This will be the second and final phase of Opus’ work at the business park. The company earlier built and sold two additional speculative industrial developments there in 2016.
Matt Kurucz, senior manager of real estate development with Opus Development Co., said that this is an ideal time to build industrial facilities in and around the Chicago area. The local industrial market is a busy one, too, with plenty of sales and leases.
There is demand, too, for modern industrial facilities located along the I-55 corridor. Because this demand is showing no sign of slowing, Kurucz says Opus is confident that plenty of potential industrial tenants will lease space in the new facility once it is completed.
“This is a good time to be building,” Kurucz said. “This time around is different from the last peak of the market, back in 2007 and 2008, prior to the Great Recession. There are market restraints in place now in terms of spec building. There is not the fear of seeing the market become overbuilt in the same way we saw in 2008.”
The new building will feature 30-foot clear height and will be able to accommodate a single user or up to three tenants. The building will have 12 loading docks – a number that can be expanded to 28 – 16 trailer parking positions, up to 88 car parking spaces and an Early Suppression Fast Response sprinkler system.
Opus expects construction on 101 Paragon to begin this spring, with the work wrapping in late August of this year. Opus Development Company will be the developer, while Opus Design Build will be the design-builder. Opus AE Group will be the architect and structural engineer.
Jason West and Sean Henrick of Cushman & Wakefield will market the property for lease.
Kurucz told Chicago Industrial Properties that he expects plenty of demand for Opus’ new spec building. This year, he said, is showing all the signs of another busy industrial market in Chicago and its suburbs.
“There is some political risk out there with a new administration, of course,” Kurucz said. “But the general feeling right now is that it doesn’t look like the uncertainty is going to have as much of an impact as was originally thought. Of course, we could be wrong. It’s hard to know what to think every morning when you read the news. But right now, it looks to me like the status quo will continue, and that’s good news for the industrial market.”
Opus has already had success at this particular business park. The company bought 22 acres of land at the Paragon Business Park in the late summer of 2014 with the goal of developing the parcel as a two-phase development.
In the first phase, Opus developed a pair of industrial buildings. In 2016, the company sold both of them, one to an investor and the second to an end user.
“It was a natural progression to go ahead with building the third,” Kurucz said. “I believe there will be significant demand for this building. We are one of the few developers and owners in the I-55 corridor who can sell buildings. The I-55 market is dominated by REITs and institutional owners who want to hold onto their buildings long-term. By being able to sell our buildings, we are filling a niche.”
Kurucz said that the Romeoville business park is a good location for industrial users. The park boasts strong highway infrastructure, of course, and easy access to the entire population of the metropolitan Chicago area.
That’s an important benefit for any possible tenants of the new industrial building, Kurucz said. Tenants that locate in Chicago’s I-55 corridor tend to serve the Chicago market. They aren’t usually interested in distributing to a multi-state area, Kurucz said.
That’s why the biggest industrial buildings in the Chicago area tend to cluster in the Interstate-88 corridor. Those are the multi-state end users, Kurucz said.
“The I-55 users are generally focused on the Illinois market,” Kurucz said. “And this location is a great one for those users. It is so easy for them to reach the population of Chicago. That is why this location will always be a draw for those users.”