Prologis Makes Second $100M Warehouse Bet in Four Months
Prologis committed another $100M to spec warehouses near Chicago, its second nine-figure industrial bet in four months as vacancy in the region climbs.
Prologis, the world’s largest industrial landlord, has committed another $100 million to speculative warehouse development outside Chicago, its second nine-figure bet in the market in four months. The company bought 69 acres in Minooka, Illinois, 55 miles southwest of the city, where it plans a single-story, 1,002,000-square-foot cross-dock building called Minooka Exchange, according to The Real Deal.
Why it matters
This is not a case of an opportunistic buyer picking off distressed industrial at the bottom. It is the sector’s largest owner deploying fresh capital into ground-up spec development while Chicago-area industrial vacancy is rising and absorption has gone slender, the classic conditions that make most landlords pull back. Prologis is betting the opposite: that companies consolidating scattered smaller leases into one large, well-located building will drive demand for big-box space even as overall demand softens. For national industrial pipelines, including the ones Florida developers are weighing, that is a read on where the biggest player in the asset class thinks new large-format supply still pencils.
The numbers
Minooka Exchange sits in a Prologis industrial park near Minooka and McLinden roads, adjacent to Canadian National Railway’s Chicago Logistics Hub. The 40-foot-clear building works out to roughly $100 per square foot of total development cost. It follows a June purchase of a 25-acre parcel at 375 Army Trail Road in Glendale Heights, bought out of broadcaster Audacy’s Chapter 11 bankruptcy sale, where Prologis is building two warehouses totaling 454,000 square feet for another $100 million, near $220 a square foot. Together the two projects put roughly $200 million and 1.45 million square feet of new industrial supply into the market. Prologis reports it already owns 79 million square feet across 341 properties in Greater Chicago.
What’s next
Construction at Glendale Heights is set to begin later this year, Prologis senior vice president Josh Zemon has said. On Minooka, a Prologis investment officer framed the bet directly: “Minooka Exchange will add more than 1 million square feet of modern logistics space to Chicago’s supply-constrained market,” Josh Bauer said, according to REJournals. Whether that consolidation trend holds is the question every large industrial owner, in Chicago or South Florida, is now underwriting to.