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Marina Crossings Marks Biggest Chicago Spec Industrial Development Since 1905

Near South Side Site Has Direct Access to Many of the Nation’s Roads and Rails
June 5, 2018
The largest industrial market in the nation by square feet is about to swell again as walls go up on Marina Crossings, the biggest speculative industrial development under construction within Chicago’s city limits since 1905.

That was the year the storied Central Manufacturing District began to spring up on a 265-acre site along Pershing Road and a branch of the Chicago River, bordering the McKinley Park and Back of the Yards neighborhoods on the city’s Near South Side. It connected Founder Frederick Henry Prince’s Chicago Junction Railroad to the legendary Union Stock Yards meatpacking district, which at one time produced as much as 82 percent of the nation’s consumable meat.

Marina Crossings, a 633,000-square-foot, state-of-the-art industrial project that sits on 35 acres, has no such meatpacking designs. But with the Central Manufacturing District, the nation’s first planned industrial park only blocks away, Marina Crossings’ developers hope to carve out a modern-day story of how industrial space was revolutionized all those many years ago.

"There’s great history all around that area, and Marina Crossings could be another piece of that," said Cushman & Wakefield Managing Director Larry Goldwasser, who is marketing the property. The developers are MAT L.P. and unnamed institutional investors advised by JP Morgan Asset Management. The shell building is expected to be completed in October.

Marina Crossings sits only four blocks from the Central Manufacturing District, and is smack dab in the middle of the city and much of the country. It still has rail access and is just off the Interstate 55 Stevenson Expressway, one of the strongest-performing industrial areas in the greater Chicago area.

"Many of the nation's roads and rails lead straight to Chicago, which makes this market undeniably attractive from a distribution standpoint," according to a recent CoStar research report.

What’s more, "Demand for Chicago industrial space is robust," the report noted. In 2017, net absorption reached more than 19 million square feet. That marked Chicago’s second-best showing, behind 21 million square feet in 2015, during the recovery cycle. "Partly this is a result of deliveries -- big tenants simply didn't have many good options until developers started to deliver new space," the report said.

From an investments standpoint, the metro area has seen about $3 billion in sales volume each year from 2014 through 2017, according to the report, and cap rates continue to average about 6 percent. "Through the first quarter of 2018, investment volume and inventory turnover [were] off to a slower start than usual, however, pricing continues to rise," the report said. The vacancy rates on the 1.3 billion of available square feet metro-wide stands at about 6.3 percent.

Meanwhile, the Central Manufacturing District, while old and outdated, is prime for redevelopment. The city has entered a pair of historic city-owned buildings on the site into the international Reinventing Cities design competition.

Built in 1918, the two industrial buildings are more than 570,000 square feet in size and were put on the National Register of Historic Places in 2015. The site also includes a parking lot and single-story parking garage. Proposals were due in May.

Jennifer Waters, Chicago Reporter  CoStar Group   
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