Industrial developer Logistics Property Co. said late Tuesday that it has broken ground on the first multistory warehouse facility in Chicago.
The two-story, 1.2 million-square-foot warehouse will be delivered during the summer of 2024, the Chicago-based company said. The 11.5-acre parcel, located on West Division Street, will also include a five-story parking deck.
Each floor will contain 135-foot truck courts, Logistics Property said. The ground floor will boast a 36-foot clear height, 28 dock doors and two drive-in doors. The second floor will feature a 33-foot clear height and the same number of deck and drive-in doors.
The top floor will include separate up and down double-wide ramps capable of accommodating 53-foot tractor-trailers, the company said.
The model of multistory warehouses in the U.S. took root about four years ago as developers began looking for ways to build in densely populated urban areas where available land is scarce and extremely expensive. Urban infill land has become increasingly popular as tenants seek to position their goods closer to end customers.
Chicago, which has emerged in recent years as the nation’s hottest market for logistics property, is relatively constrained by access to available land. As of the end of the first quarter, the city ranked ninth in the amount of square feet under construction with 20.5 million, according to data from real estate services firm CBRE Group Inc. (NYSE: CBRE).
With the exception of cities like New York, Seattle and now Chicago, the multistory model has not caught on in the U.S.
Developers have been put off by the significantly higher material and labor costs that come with double- or triple-decking a facility. Building a two-story structure can cost $150 per square feet more than the traditional single-level facility because of higher material and construction costs that come with double decking.
Others have questioned the need for such a model given the cost and the viable option of positioning products in warehouses a few miles or so from an urban core.
Logistics Property operates 52 facilities in 23 North American markets.
