Mega-warehouses are sprouting up across Chicagoland, an unprecedented boom that shows no sign of slowing down. Retailers and other product distributors stand ready to pack the vast buildings with goods, feeding the appetite for ever-faster deliveries to online customers, and developers say they can barely keep up with demand.
Distributors are already making inquiries about Molto Properties’ new suburban logistics parks in Minooka and Romeoville, where the company is set to kick off construction of several big-box warehouses with up to 1.1 million square feet.
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“We haven’t even broken ground yet, people have just seen bulldozers on the site,” said Molto’s senior principal Mike Powers.
The warehouse construction boom could cut costs for consumers, he added. Prices surged during the pandemic, partly due to supply chain disruptions that sent trucking costs soaring as companies struggled to move stacked up shipping containers. But big-box buildings will allow companies to stock up inventories, so if further disruptions occur, product deliveries can continue uninterrupted.
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“People might see a big warehouse, and think, ‘no big deal,’ ” Powers said. “But if (companies) have to pay more for trucks, we have to pay more when we buy stuff.”
Molto plans to break ground this month on a 1.1-million-square-foot distribution facility, the first phase of its 110-acre Minooka Ridge Business Park in Minooka, a village near I-80 and southwest of Joliet. The company is also developing Weber55 Logistics Park, a two-building complex on 60 acres at the northeast corner of Weber and Taylor roads in Romeoville, another Joliet suburb. That site will include distribution facilities of 627,840 square feet and 270,000 square feet.
Molto hired Jim Estus and Matthew Stauber of Colliers International to market the new projects for lease.
Other developers are just as active. At the end of March, 44 buildings of more than 200,000 square feet, a record-breaking 23.7 million square feet in total, were underway across the Chicago metropolitan area, according to Colliers International.
And tenants are plentiful. In the second quarter alone, Amazon leased a 1-million-square-foot warehouse in Joliet, and another in Kenosha, while other companies, including NFI, SC Johnson and RJW Logistics, signed deals for more than 500,000 square feet.
The amount of big-box industrial space that is vacant in the Chicago area tanked during the first quarter of 2022 because so much space was leased or occupied. The industrial vacancy rate fell ”by more than a full percentage point to 2.61%, a record low by a wide margin,” Colliers reported.
The rate is going down because the vacant space is getting leased and occupied.
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Molto’s managing principal Todd Naccarato said there’s no letup in sight. The explosion in online ordering over the past two years convinced firms to reconstruct their supply chains. Older warehouses, many between 200,000 and 400,00 square feet, are now bursting at the seams, so 1 million square footers are not only becoming more common, but also include advanced technology that allows quicker package sorting.
“The pandemic created a lot of additional demand that normally was handled through retail outlets,” he said.
The construction boom is also a jobs boom, Powers said.
“You’re not talking about 10 people working in a 1-million-square-foot warehouse, for each you’re talking about hundreds of jobs.”
