In a recent article for the Illinois Real Estate Journal, HSA’s Executive Vice President and Managing Director of Industrial Services, Tim Thompson (pictured above on the far right), explores the complicated analysis involved in the decision to launch a spec development. Using HSA’s Park 355 Phase II as a case study, Tim identifies a few critical compelling factors from declining vacancy rates to target customer insights, that motivated the leadership at HSA and Industrial Income Trust to break ground on the 180,480-square-foot industrial facility after a stall in commercial real estate spec development during the economic downturn.
Based on Q1 2013 data provided by CoStar Group, the south I-55 corridor has one of the lowest vacancy rates at 6.9 percent and was among the highest submarkets in net absorption throughout the Chicago area. Yet, with all of this positive leasing activity, through the first quarter of this year there was no new construction to address the continuous demand. The combination of those key market indicators suggested inefficiency in the market that would soon lead to a lack of supply.
By monitoring the trends closely and having them validated through our experience in the area, we were confident that we could deliver and lease new product for a specific user group.
About Park 355 – Phase II
In April, HSA broke ground on Phase II of Park 355, in Woodridge, Illinois. The 180,480-square-foot building is a joint-development between HSA Commercial and Denver-based Industrial Income Trust. Located at 2143 Internationale Parkway, the new building will sit on 9.49 acres and include 30-foot clear heights, an ESFR sprinkler system, 28 exterior truck docks with levelers, and four drive-in doors. Park 355 Phase II is near the junction of I-55 and I-355 and features frontage on I-355 as well as the flexibility to accommodate the requirements of both smaller and larger industrial tenants. The project’s first phase consisted of a 254,453-square-foot distribution center leased to national logistics and manufacturing tenants including Ace Hardware, Tricor Braun, and DIK Drugs.