Dermody Properties Closes Land Deal for $500M Project

Building 3 of the planned 10-building logistics park, The Logistics Campus. Image courtesy of Dermody Properties

Dermody Properties has completed its previously announced acquisition of the 232-acre former Allstate Corp. corporate campus in Glenview, Ill., in suburban Chicago.

Over the coming years, Dermody will demolish the five existing 1960s- and 1970s-era office buildings and redevelop the site as The Logistics Campus, a $500 million, 10-building, 3.2 million-square-foot Class A logistics park.

Dermody will immediately begin construction on five buildings totaling 1.2 million square feet and scheduled for completion in the second and third quarters of 2023. A groundbreaking ceremony is scheduled for next week.

The remaining 125 acres will be available for multiple build-to-suits or a single building of as much as 2 million square feet.

In a prepared statement, Dermody President Douglas Kiersey Jr. said, “This redevelopment project stands at the intersection of two significant and durable trends—work from home and e-commerce.”

The campus is on Sanders Road, adjacent to I-294, and only about a 10-minute drive to O’Hare International Airport.

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In addition to what will be torn down and replaced, Dermody is emphasizing the value of what will remain in place at the former Allstate site.

For example, the redevelopment reportedly will benefit from the repurposing of existing mature landscaping and ponds. Dermody says it plans to preserve 50 years of plant life and growth on the site, including relocating hundreds of trees to complement the industrial buildings.

The company is also highlighting the existing ground transportation infrastructure. More specifically, a Dermody spokesperson explained, the public intersection connecting north and southbound I-294 and Willow Road, as well as the direct access point to the campus at Willow Road and Protection Parkway, were all designed to accommodate Allstate’s traffic volume at peak employment.

The capacity of those roads exceeds the likely volumes of the cars and trucks moving in and out of The Logistics Campus, the spokesperson said. Further, when the project is completed, Protection Parkway will be used as a spine road running all the way to the south of the project, so a vast majority of the vehicular traffic will circulate within the campus.

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In Commercial Property Executive’s November 2021 story on the initial announcement about The Logistics Campus, Kiersey called the site acquisition “a generational opportunity.”

The possibility was mentioned at that time of Allstate being one of the investors in the redevelopment, but the Dermody spokesperson told Commercial Property Executive yesterday (on Wednesday, Oct.19), that Dermody is not disclosing whether that in fact happened.

The suburban Chicago office market might be slowly turning a corner, with a modest amount of positive absorption—just 103,000 square feet—in the second quarter, after nine straight quarters of occupancy losses, according to a report from JLL. Still, little more progress is expected by the end of the year.

Interestingly, JLL notes that two dated corporate office campuses in the Chicago suburbs have sold to industrial developers so far this year (Walgreens in addition to Allstate). “Expect continued interest in obsolete corporate campuses by industrial developers especially with the campuses of Baxter, Sears, and BP still on the market,” according to JLL.