Burgeoning North Avenue Corridor Offers Opportunity for Industrial Investors and Convenience for End-Users
There are big changes happening in Central DuPage County along North Avenue, the high-traffic, high-speed corridor connecting suburbs like Elmhurst and Carol Stream to St. Charles and Fox River Valley, and most importantly the four-way interchange to Interstate 355. Older homes, vacant commercial buildings, sporadic smaller vacant land parcels (+/- 1 ac) and industrial buildings that have lined the arterial road for more than 50 years are being replaced with modern, efficient distribution facilities. On North Avenue specifically, four new buildings have been developed in the past three years, two within the past 12 months. Two more buildings have been approved and will break ground in spring 2020.
Why are industrial investors and end-users flocking to this area? According to Kelly Disser, executive vice president with the NAI Hiffman Industrial Service Group and an expert on the North Avenue submarket, myriad things are driving the transformation of North Avenue:
- Industrial occupiers want newer, modern buildings, lower land prices and lower real estate taxes – a trifecta that’s hard to come by. They can find all three along North Avenue in Central DuPage County, which is as conveniently located as popular markets like O’Hare in Cook County – but offers lower costs of occupancy for tenants and users.
- In general, investors and developers have greater appetites for sites near transportation arteries, including Interstates 355 and 290, as well as the Illinois Route 390 Tollway; heading farther west increases drive times and logistics costs. One such developer is Dermody Properties, which purchased 365 North Avenue in Carol Stream, Ill., in 2016, demolished a former metal panel building on the site and built a 381,600-square-foot modern industrial spec facility with 36’ clear heights, advanced LED lighting systems and more.
- Last-mile, e-commerce logistical demands are contributing to the demand for property along this well-positioned corridor, from which distributors can deliver product on a daily basis to their customers in nearby, densely populated, affluent suburbs. Additionally, service, consumer goods, and traditional distribution and light manufacturing companies are attracted to the location for the high visibility and quasi-retail character of the corridor.
- Developers can aggregate the area’s smaller parcels and demolish older buildings to create one large, modern warehouse with higher ceilings, increased power loads, heavier car parking and expanded loading areas. Disser recently worked with ML Realty Partners on closing a five-parcel assemblage for a redevelopment project. This project includes +/- 7ac and will result in delivery of a 32’ clear height, 116,000-square-foot new building that will be divisible down to 30,000-square-foot units. It will break ground in Q1 2020, and the building will be available for lease Q3 2020. The building has outstanding visibility and is already in demand.
Disser’s first assemblage in the corridor (13.5 ac among +/- 9 parcels and 5 land sellers) delivered a 183,000-square-foot building in Q1 2019 and was leased in Q3 2019 to a single tenant, meeting pro forma expectations. It was viewed as a success for all involved, including the municipality, Glendale Heights, Ill., and the developer, Duke Realty.
- Villages are eager to benefit from the redevelopment along North Avenue with an improved tax base, improved visual aesthetics/perception of the corridor, expanded job opportunities, and buildings designed to have maximum flexibility to accommodate a large cross-section of users attracted to the location and visibility.
- Owners of functionally obsolete assets are in a position to command a high sales price in this corridor. In some cases, owners can make capital improvements to attract and retain tenants.
The transformation of this important industrial corridor is highlighted in this video. If you’d like to find out more about the opportunities along the burgeoning North Avenue Corridor, contact Kelly Disser, email@example.com or 630 317 0721 or David Haigh, firstname.lastname@example.org or 630 693 0649.