Built for the freeze: Why Karis Cold is betting big on Chicago’s cold storage gap
By Brandi Smith
In a city known for its deep-dish pizza and harsh winters, it turns out what’s in short supply is cold. Specifically, cold storage.
Even as construction costs, entitlement delays and municipal hurdles stacked up, Karis Cold pressed ahead with its latest development: 3815 S. Ashland Ave., a 99,530-square-foot cold storage facility rising in Chicago’s historic Stockyards district, dubbed Karis
Stockyards. Development Solutions Inc. serves as the project’s general contractor and the leasing team features John Basile, Alex Sutterer and Packy Doyle of NAI Hiffman. The project is set to deliver in July.
“There was a void in the market and a real need for modern, food-grade space in that area,” said Jake Finley, CEO of Karis Cold. “We saw an opportunity in a key
location and decided we were going to push through every obstacle to get it done.”
Located four miles south of downtown, the site sits within the Planned Manufacturing District, home to more than 265 businesses and more than 15,000 jobs,
PUBLISHER
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VICE PRESIDENT OF SALES Frank E. Biondo Frank.biondo@rejournals.com
Joe Pomerenke Arco/Murray National Construction Company, Inc
Adam Roth NAI Hiffman
Mike Yungerman Opus Group
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Built for the freeze: Why Karis Cold is betting big on Chicago’s cold storage gap Even as construction costs, entitlement delays and municipal hurdles stacked up, Karis Cold pressed ahead with its latest development: 3815 S. Ashland Ave., a 99,530-square-foot cold storage facility rising in Chicago’s historic Stockyards district, dubbed Karis Stockyards.
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Mid-year check-in: Chicago’s industrial market adjusts to a new normal On Chicago’s South Side, a once-vacant expanse is now the site of speculative opportunity. Ryan Companies’ Pullman Crossings is bringing 330,000 square feet of new industrial space to market in 2025.
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Vacancy rate rises, absorption falls in Chicago big box industrial market Big box industrial space in the Chicago market recorded negative absorption in the first quarter of the year, the first time this has happened in eight years, according to the latest research from Colliers.
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Construction experts discuss CRE market momentum and headwinds at SIOR luncheon While headlines continue to swirl with economic uncertainty, one thing remains clear—real estate users and developers are still eager to build.
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How tariffs are reshaping the industrial investment landscape and where opportunity lies for institutional capital Tariffs, trade policy, and geopolitical negotiations remain top of mind for investors as we approach the midpoint of the year.
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Colliers report: Industrial sales activity on the rise Investors are still sinking their dollars in U.S. industrial real estate, even with the threats of tariffs and other uncertainties facing the country's economy.
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Mid-year check-in: Chicago’s industrial market adjusts to a new normal
By Brandi Smith
On Chicago’s South Side, a once-vacant expanse is now the site of speculative opportunity. Ryan Companies’ Pullman Crossings is bringing 330,000 square feet of new industrial space to market in 2025. It’s a bold play in a year when many developers have shelved speculative construction.
“Smaller and mid-size products will be the focus of developers and tenants,” said Kyle Schott, vice president of real estate development at Ryan Companies.
“We have seen a shift from large suburban greenfield development to smaller in-fill projects to accommodate tenants looking for an upgrade within their current urban markets while large-scale distribution recalibrates their needs.”
That pivot is reshaping industrial development across greater Chicago. With large-block leasing thin, inflation cooling and tariffs casting a long shadow, momentum has shifted to well-located, mid-sized product. The second half of 2025 may not bring a full rebound, but it’s shaping up to be more active than the first.
“Activity on renewal leasing has been strong, as businesses value maintaining their strategic locations, supply chain networks and established employee bases,” said Adam Moore, senior regional director and market leader for First Industrial Realty Trust. “Leasing decision-making from companies considering new supply chain investments for growth continues to be measured. Further clarity on tariffs and the direction of the economy is important to the demand side of the equation.”
Large block requirements above 1 million square feet remain rare. Instead, deals are materializing in tighter size bands, where users are focused on quality.
“Deals are still getting done for the best sites, but overall decision-making has slowed while investors and tenants work through uncertainties in the market,” Schott said.
With elevated vacancy in the 500,000-square-foot-and-up range, most developers have paused largescale spec. What’s emerging instead is
targeted new product in undersupplied categories: sub-200,000-square-foot buildings, infill locations and best-inclass space.
“We expect new speculative construction to remain disciplined and are hopeful for increasing velocity in tenant demand for incremental space,” Moore said. “There’s noticeably less new space coming to market and many leasing decisions were deferred in the first half. This creates the potential for a release of pent-up demand as the year progresses.”
First Industrial’s First Park 94 in Kenosha is one of the few sites positioned to catch that release. With infrastructure in place and pads rough graded, the park offers faster build-to-suit delivery timelines than a traditional ground-up start.
A recently completed 120,000-squarefoot move-in-ready facility is already drawing interest from prospective tenants.
Pullman Crossings is another example. Its third phase, delivered in April, added 170,000 square feet of speculative
space. The final 160,000-square-foot building is slated to complete in September.
“Whereas last mile gained all the attention during Covid, it appears that tenants no longer have limitless funds to be immediately next to their customers,” said John Basile, executive vice president at NAI Hiffman. “There is now a more balanced approach, and while last mile still plays a critical role, it needs to pencil out financially. My Amazon Prime next-day delivery often seems to come next-next day, but somehow we survive.”
Cold storage is another segment drawing attention in 2025. While speculative development remains rare overall, Chill Development’s Plainfield project and Karis Cold’s facility at 3815 S. Ashland are testing investor appetite in a niche where demand is expected, but not guaranteed, to outperform.
Construction timelines have stabilized, and capital is available for projects with strong fundamentals. Still, developers are watching the macro picture closely
Pullman Crossings
as they evaluate the next wave of speculative starts.
“Interest rates appear to have peaked, and come down 100 basis points in the last 12 months, and inflation has stabilized,” Basile said. “Banks are eager to lend money, especially for owner-occupied projects.”
“For more standard deals, the availability and cost of debt, along with the outlook for renewed rent growth, are critical considerations,” Moore said.
Submarket performance continues to vary by product type and investor goals. Institutional interest remains strong in infill corridors like O’Hare, I-55 and Central DuPage.
“Submarkets like Northwest Indiana and Southeast Wisconsin have been attracting increased investment,” noted Josh Bauer, vice president and investment officer with Prologis. “Some developers are focusing on next frontier submarkets, like Plainfield, while others are working to monetize their land positions in submarkets like I-80.”
“We remain highly confident in the longterm strength of the Chicago market,” said Bauer. “With a portfolio that covers both infill and emerging areas, our
"Our team here knows the markets extremely well, which gives us an advantage discovering a new piece of land to develop or help a customer find or build the perfect building to meet their needs."
local team’s deep market knowledge positions us well to identify new development opportunities and support our customers in finding or building facilities tailored to their specific needs.”
But within city limits, local policy may influence future investment decisions. One emerging factor is the Hazel Johnson Cumulative Impact Ordinance, which would require industrial developers to assess how new projects may contribute to cumulative pollution in surrounding communities.
“(It) could have an impact on future and existing industrial development within the city limits,” Schott said.
Even as development remains measured, absorption is trending positive. Many in the market expect deferred leasing activity to convert to signed deals in the second half of the year.
“We are very bullish on the Chicago market,” said Bauer, sharing that the Prologis portfolio spans infill and frontier locations. “Our team here knows the
markets extremely well, which gives us an advantage discovering a new piece of land to develop or help customers find or build the perfect building to meet their needs.”
This is no longer a volume game—it’s a timing game. Developers who focus on execution-ready sites, align with evolving tenant needs and stay nimble in response to policy and capital shifts will lead the market through the second half of 2025.
Vacancy rate rises, absorption falls in Chicago big box industrial market
By Dan Rafter
Big box industrial space in the Chicago market recorded negative absorption in the first quarter of the year, the first time this has happened in eight years, according to the latest research from Colliers.
In its Chicago Big Box Industrial Research Report, Colliers said that big box spaces in the Chicago market recorded negative 1.2 million square feet of absorption in the first quarter of the year. That marks a 4.4-million-squarefoot swing from the positive 3.2 million square feet of absorption that the Chicago-area big box industrial market recorded in the fourth quarter of 2024.
Colliers defines big box space as modern distribution facilities totaling 200,000 square feet or more with clear heights of at least 28 feet.
In its report, Colliers said that the vacancy rate for this space in the Chicago
"Colliers reported that more than 8.2 million square feet of new big box space is currently under construction in the Chicago market."
market increased by 78 basis points to 9.44% in the first quarter. The vacancy rate for this space in the fourth quarter of 2024 stood at 8.64%.
What's behind the jump in vacancy rate? Colliers says that the rise was primarily because of an influx of newly vacant sec-
ond-generation space and not because of new construction.
In other big box news, Colliers reported that more than 1.3 million square feet of new big box space was completed in the Chicago market in the first quarter of the year. That, too, is down, a dip from more than 3.4 million square feet of
construction completions in the fourth quarter of last year.
Colliers reported that more than 8.2 million square feet of new big box space is currently under construction in the Chicago market. That is up from more than 5.8 million square feet during the last three quarters of 2024.
Image by THAM YUAN YUAN from Pixabay.
Construction experts discuss CRE market momentum and headwinds at SIOR luncheon
By Ryan Moen
While headlines continue to swirl with economic uncertainty, one thing remains clear—real estate users and developers are still eager to build. However, doing so and finding a path forward requires figuring out how to navigate a changing set of market conditions, particularly tariffs and lead times.
On April 8th, the Chicago Chapter of The Society of Industrial and Office Realtors (SIOR) hosted its Speaker Series luncheon focused on construction trends, with panelists pulling back the curtain on current deal flow, lead time issues, pricing pressures and the growing demand for design-build delivery in both the office and industrial markets. The panel was moderated by Jacob Karamol, LEED AP of Development Solutions Inc., who spoke with panelists David Michael, vice president at Peak Construction Corporation; Michael Pacini, president of PREMIER Design + Build Group; and Matthew Harrity, project estimator and business development lead at TW Chicago.
Together, the panel covered the state of the industrial and office markets, inflation, strategies for addressing tariffs and material costs, and the evolution of manufacturing and labor considerations in today’s real estate environment.
Resilient Demand, Current Volatility
All panelists described entering 2025 with optimism thanks to strong preconstruction pipelines and renewed interest from users in both industrial and office interiors. However, their tone shifted a few days before the luncheon as tariff-related uncertainty and market fluctuations introduced a few new questions.
“Coming into the year, we were as busy as we had ever been,” said Michael. “But the last week has added some headwinds, particularly in Chicago, even while we’re still seeing strong activity on the coasts.”
Pacini added that although 2023 was a slower year for project origination, 2024 brought renewed deal flow, especially for design-build work with long-term planning horizons. “We saw a lot of optimism at the beginning of the year and were pretty bullish coming into 2025,” he said. “But the last few weeks have been a head-scratcher. We are all sitting on the sidelines and no one is making any money or doing anything. There has been a lot of confusion, but still, the appetite and demand to develop is there.”
ters, spec suites, and high-end retail are all picking up and expect a lot more foot traffic, he said. “Landlords are investing to stay competitive and attract tenants.”
Harrity agreed demand hasn’t cooled— especially downtown. Amenity cen -
Tariff Talk and Lead Times
One of the hottest topics of the discussion was the uncertainty introduced by new tariffs and the resulting ripple effects across construction materials. While none of the panelists noted any immediate devastating impacts, all
April SIOR Speaker Series Luncheon included (left to right): Jacob Karamol, The DSI Group, Owner & Managing Principal; David Michael, Peak Construction, Vice President – Sales; Michael Pacini, Premier Design Build, President; and Matthew Harrity, TW Chicago, Business Development/Estimator. (Photo courtesy of SIOR Chicago.)
said that they are preparing their clients for potential increases.
Pacini described running a full material cost impact analysis over the weekend with his team, estimating worst-case tariff scenarios could result in a 3 to 4% increase on typical industrial shells. “We’re not seeing catastrophic numbers—yet,” he said, “but our job is to isolate risk and guide our clients through it.”
Michael added that although tariffs have not yet derailed projects, the unknowns are driving changes in buyout strategy. He explained that he is being honest with clients and advising them to lock in pricing when possible and expect volatility for the next three to nine months.
Lead times for many core materials such as precast, steel, and roofing have normalized, panelists all noted. The bigger challenge now, they explained is power and public utilities, with Michael noting that switchgear, large generators, and utility responsiveness—especially in markets with heavy data center activity—are delaying projects far more than typical building materials.
Design Build, the Value of Speed
All three of the panelists stressed the value of early engagement and speed-to-market in the current environment. They noted that it is one of the core advantages of design-build delivery, especially when it comes to mitigating risks tied to tariffs, lead times, and inflation.
“When the GC comes in with the architect at the same time, you can make smarter, faster decisions about materials and scheduling,” said Harrity. “We’re finding alternate options— reusing doors from the building, using temporary doors, swapping brands—whatever it takes to stay on track.”
Pacini agreed and noted that the best thing you can do for a client is isolate exposure and buy early. He also said to get creative, which is where a design-build approach gives you the edge. “You need to figure out what the exposures are and if the deal can still pencil if all of the exposures come to market.”
Labor, Location, and Talent
Whether it is subcontractor availability, recruiting the next generation of estimators and supers, or building culture through office amenities,
labor continues to be a top challenge, panelists agreed.
Michael described investments his firm made in upgrading its Rosemont headquarters to retain talent, while Pacini pointed to some aggressive early career hiring strategies. “We’re going into high schools, into colleges and trying to grow talent internally, from the ground up. The people we need just don’t exist in the market like they did 10 years ago.”
Harrity agreed, noting that location also matters. “We’re seeing younger workers want to be downtown. That’s where the energy is—and it’s shaping how we build teams and where we work.”
Opportunities in Manufacturing, Mid-Sized Projects
As the conversation wrapped up, all three panelists were bullish on opportunities ahead, particularly in terms of manufacturing or mission critical facilities and smaller-footprint urban infill.
According to Pacini, manufacturing expansions are heating up across the country and while the megaprojects are in the headlines, there is a lot of
activity with entrepreneurial users looking for 25,000 square feet to 50,000 square feet. “Those deals are everywhere,” he said.
Harrity pointed to signs of life in downtown Chicago, where full-floor office suites are being carved into smaller units and leasing up quickly. He noted that high-end retail is investing again, which he says indicates that people believe in the office comeback.
Overall, panelists at the SIOR luncheon agreed that navigating today’s construction landscape requires more than cost control. They agree that it requires good strategy with cross-disciplinary collaboration, and bold decision-making in uncertain times.
Ryan Moen, is president of the SIOR Chicago Chapter and principal and founder of Versa Real Estate Services. For more information on the SIOR Chicago Chapter or its Speakers Series luncheons, visit siorchicago.org.
How tariffs are reshaping the industrial investment landscape and where opportunity lies for institutional capital
By MaCauley Studdard, Managing Director at ElmTree Funds
Tariffs, trade policy, and geopolitical negotiations remain top of mind for investors as we approach the midpoint of the year. Given that negotiations are rapidly evolving and ongoing, predicting the potential impact on the macroeconomy and individual sectors, such as industrial real estate, with complete certainty is challenging at this time.
With that said, looking at previous periods of trade disruption can serve as a helpful guide. At the onset of the COVID-19 pandemic, industrial real estate initially faced headwinds as tenants and investors worked through the dynamic changes to the economy and the supply chain environment. However, over time, the trade disruptions in that period proved to be a tailwind for the sector as companies invested in their domestic supply chains to prevent similar supply chain shocks moving forward.
Today, even as tariffs are creating uncertainty, the industrial sector is undergoing a structural transformation driven by secular growth trends including growing e-commerce sales, the adoption of automation and robotics, and the onshoring of supply chains to the U.S. These trends have remained steadfast amidst the uncertainty in the market, particularly onshoring with many companies continuing to announce U.S. supply chain investments after the tariffs were put in place.
For institutional investors, we believe there are opportunities to capitalize on these long-term growth trends while investing in durable, defensive assets that can withstand the short-term volatility. Further, rather than seeing tariffs solely as a risk, investors should also consider the potential catalysts, such as driving new demand for domestic infrastructure and modern industrial facilities.
Tariffs Are Accelerating a Shift That Already Existed
While it might not have been as evident as in recent months, the new round of tariff policies being introduced or proposed in 2025 are reinforcing some of the trends that were already underway. Ongoing geopolitical tensions, pandemic-era supply chain disruptions, as well as a growing push for domestic manufacturing have changed how companies are thinking about their manufacturing and distribution strategies.
As corporations have looked to minimize risk and improve their operational stability, the demand for domestic industrial
space has increased, particularly for newly constructed facilities that provide long-term efficiencies and allow for the use of automation and robotics. Tariffs have only reinforced this supply chain strategy serving as a further catalyst for investments in physical infrastructure, supply chain autonomy, and long-term operational resiliency.
Additionally, certain industries with underlying growth drivers serve as relevant examples for why demand for build-tosuit development has remained in place. Industries including pharmaceuticals, food and beverage, and digital infrastructure suppliers are continuing to expand their logistics networks despite these global pressures. Tenants in these industries have a need for new facilities to capitalize on changes occurring in their respective sectors.
In particular, demand for build-to-suit cold storage and data center facilities remains high. For cold storage, the demand is being driven by growth in the pharmaceutical industry along with food and beverage companies looking to capitalize on a consumer push towards fresh food and the increased adoption of food delivery. For data centers, the growth is being driven by hyperscale tenants’ need for new facilities to capitalize on the growth in AI and cloud computing.
These trends show that build-to-suit demand growth is often structural rather than cyclical. As a result, tariffs should indicate to institutional investors that, despite macroeconomic uncertainty, de-
mand for high-quality, future-proof industrial assets remains structurally sound.
The Acceleration of Build-to-Suit
Despite tariffs, build-to-suit development has remained robust while speculative industrial developments have continued to decline. Corporate decision making has slowed a bit following the recent tariff announcements, but given build-to-suit industrial facilities are driven by specific tenant needs and are customized for long-term functionality, many build-tosuit projects have continued to move forward.
In terms of investment characteristics, build-to-suit facilities are typically leased for terms of 10 to 20 years or more, which mitigates against the re-leasing risk typically associated with real estate investments. Additionally, due to the customized nature of construction, buildto-suits tend to be strategically important to tenants’ overall operations, which increases the probability of renewal at lease expiration.
The newly constructed nature of buildto-suit assets also leads to owning assets that can maintain value over time due to their modern designs, Class A specifications and strategic locations. Infrastructure considerations, such as proximity to highways, airports, ports, and access to energy, as well as labor availability, have become critical underwriting components for many institutional investors. These factors not only determine the strategic value of a property to a tenant but also support the long-term viability and re-lease potential of the property.
Site selection for a build-to-suit property is often the result of several years of planning by the corporation, which typically results in choosing optimal locations relative to infrastructure access and labor availability.
This combination of long-term leases, high renewal probabilities, and strategically located, Class A real estate offers a highly predictable income stream over a long-term investment horizon. During periods of elevated uncertainty and volatility, these defensive attributes often make build-to-suit assets highly sought after.
Institutional capital is gravitating toward this end of the industrial market, recognizing that build-to-suits assets offer a unique mix of security and scalability. The tenants occupying these properties, often Fortune 50, investment-grade-rated companies, are less likely to be de-
terred by short-term trade disruptions given their strategic planning and growth orientation is long-term in nature. They are also well capitalized companies with a proven track record of operating throughout various economic cycles, which minimizes tenant default risk in a potentially softening economic environment.
Domestic Demand Drivers
Outside of tariff dynamics, domestic fundamentals driving industrial real estate are strong. E-commerce growth continues to strengthen demand for logistics and last-mile facilities. According to the most recent U.S. Census report, online sales continue to gain market share, contributing 16.4% of total quarterly retail sales at the end of 2024 versus 14.9% at the beginning of 2023.
Another fundamental that is driving local growth is onshoring and reshoring efforts, which are prompting major investments in U.S. manufacturing and distribution hubs. The strength of the this trend has been highlighted by various companies announcing large-scale supply chain expansion plans after the onset of tariffs including Roche’s plan to invest $50 billion in U.S. manufacturing and R&D, Amazon’s $15 billion warehouse expansion plan, Nvidia’s plan to invest $500 billion in U.S. AI infrastructure, Abbott Laboratories plan to invest $500 million in manufacturing and R&D in the U.S., Novartis’ plan to invest $23 billion in U.S. manufacturing and R&D facilities, and Kimberly-Clark’s plan to invest $2 billion in U.S. manufacturing sites.
These large-scale manufacturing announcements will create significant follow-on demand within the build-to-suit sector. Suppliers will need to build new distribution, production and assembly facilities located near the manufacturing sites. Third-party logistics companies will need to expand their distribution footprints, which along with the manufacturing companies building out their own distribution capabilities, will drive significant demand for modern distribution facilities.
This reconfiguration of supply chains is also creating a sustained demand for industrial facilities that can support automation, robotics, and high-throughput operations. Many of the older industrial facilities across the U.S. lack the specifications needed to accommodate these capabilities so there is an ongoing flight to quality among tenants looking to future-proof their operations.
MaCauley Studdard (Photo courtesy of Elm Tree Funds.)
The shift in user demand is also being mirrored by investor behavior. Capital is continuing to flow toward new, Class A industrial assets that meet modern functionality requirements and are aligned with long-term trends in automation and domestic logistics. Tariffs, in this context, act less as a constraint and more as a confirmation that the demand for modern, domestic infrastructure is likely to persist.
Flight to Quality in Full Effect
In times of capital market dislocation, institutional investors tend to seek predictability over speculation. As a result, investors are spending more time analyzing market dynamics and tenant resilience, which leads to increased selectivity and a heightened focus on defensive strategies. Many investors are also prioritizing durable, income-generating assets that offer downside protection.
This flight to quality is particularly noticeable in the industrial sector today. Assets that have high quality tenants, long lease durations, and Class A specifications are commanding a significant premium over higher risk properties with a more speculative investment thesis. This bifurcation within the industrial sector is expected to persist over the foreseeable future as the uncertainty in the wider economy
" Industrial asset investment is ... centralized around strategy, adaptability, and alignment with future economic priorities."
will continue to push investors towards defensive investments.
Flexibility Through Relationships and Structuring
While the flight to quality favors certain types of industrial assets, it also rewards investment managers with deep relationships and a proven track record, which can be a major advantage during a time of uncertainty. From the tenant perspective, build-to-suit developments are critical pieces of their growth strategies, and they place a high level of scrutiny on the capital and development partners involved in the process to ensure the
projects are completed in a timely and efficient manner.
In rapidly evolving environments like the one today, tenants have an even stronger preference to work with counterparts that have experience in the build-to-suit sector. This experience provides tenants with confidence that their partners in the transaction can manage through the volatility in the market and ensure the property is completely on time and on budget.
Industrial’s New Age of Opportunity
Looking forward, investors should continue to monitor the tariff policy in the U.S. and its potential ramifications on
the macroeconomy and capital markets. However, amidst the macro uncertainty, there are investment opportunities that have defensive characteristics that can protect against short-term volatility while still offering access to long-term growth trends.
Given it is difficult to predict whether current protectionist trade measures are temporary or long-term, we believe the best-positioned investment strategies are those that can perform well under either condition, which favors properties with long-term leases to investment-grade tenants that can offer predictable income streams over various economic and real estate cycles.
Industrial asset investment is no longer about targeting short-term growth potential, but rather it’s centralized around strategy, adaptability, and alignment with future economic priorities. For institutional investors, this means embracing a nuanced view of the sector and seeking opportunities to build critical domestic infrastructure, deploy capital into defensive investments, and partner with high quality tenants looking to continue to grow and build competitive advantages during a period of uncertainty.
MaCauley Studdard is managing director at St. Louis-based ElmTree Funds.
many of which are tied to food processing and distribution. While the neighborhood’s legacy is built on meatpacking, the new Stockyards project signals a pivot toward advanced cold logistics infrastructure.
“We’re building a modern, efficient facility that can adapt to the evolving needs of food users,” Finley said. “Everything about this site was intentionally designed—from the 50-foot clear heights to the flex freezer space that can be converted to cooler use.”
That flexibility is built into the bones of the facility. The design features two large flex freezer areas – 40,625 and 38,463 square feet respectively – each with 50-foot clear heights. A cold dock with 15,491 square feet and a 30-foot clear height rounds out the footprint along with nearly 5,000 square feet of office and utility space. The project includes 14 exterior docks, 13 trailer stalls and a 130-foot truck court to ensure maximum operability for logistics users.
Beyond specs, the development speaks to a broader regional trend. According to Avison Young, cold storage construction in greater Chicago exploded in 2024
"Everything about this site was intentionally designed—from the 50-foot clear heights to the flex freezer space that can be converted to cooler use."
with 3.3 million square feet under development across 10 buildings. All but one of those broke ground last year and 85 percent are build-to-suit, a reflection of user-specific demands and the shortage of modern inventory.
“Users in the cold storage sector don’t just need square footage; they need reliability, hygiene, airflow, energy performance and labor access,” Finley said. “You can’t find that in older buildings. You have to build it.”
That scarcity has created urgency for developers and users alike. Avison Young reports that only 536,589 square feet of cold storage were delivered across 2022 and 2023 despite rising demand from grocers, processors and e-commerce distributors.
“Chicago is one of the best transportation and food hubs in the country, but we’re way behind on functional cold space,” Finley said. “A lot of tenants don’t want to retrofit a 60-year-old building when they can move into a pur-
pose-built facility that’s ready on Day One.”
That was the thesis behind Karis Cold’s Ashland site. The company acquired the parcel in 2022 and worked through a maze of entitlements and infrastructure planning before breaking ground in late 2023. Construction milestones are being met steadily with walls and roofing already in place. Delivery remains on track for midsummer.
COLD STORAGE (continued from page 1)
“It hasn’t been easy,” Finley said. “But we never questioned whether this project made sense. The fundamentals were too strong.”
Among those fundamentals is the site’s location. Situated in a labor-rich area with more than 186,000 blue collar workers within a 25-minute drive, the Stockyards facility is transit-accessible via CTA routes on Ashland and Pershing and offers quick access to Interstates 55 and 90. The site is just more than a mile from the Dan Ryan Expressway and less than 10 minutes from downtown.
“This is a last-mile, infill cold storage location,” Finley said. “You’re not trying to get trucks in from an hour away in the suburbs. You’re right in the middle of it – close to the customers, close to the workforce.”
That access to labor and logistics infrastructure is especially critical in cold storage, where operations are temperature-sensitive, shift-based and often require significant staffing. The 5-acre parcel allows for ample trailer and auto parking while the 6B tax classification helps offset operating costs for tenants.
“Our end users are often working on thin margins,” Finley said. “Having a well-located building that saves them on energy, labor and transportation is a huge advantage.”
Still, even with these competitive edges, cold storage development is not for the faint of heart. The buildings are complex, expensive and highly technical. They require close coordination with contractors, municipalities and utility providers. And once built, lease-up can be slow due to the specialized nature of the user base.
Karis Cold, a national developer focused on cold storage, has developed more than 1 million square feet of freezer and cooler space across major logistics markets. For Chicago, Finley sees Ashland as just the beginning.
“We love the Chicago market,” he said. “There’s more room to grow, and we’re already exploring additional opportunities.”
Until then, the company remains focused on finishing what it started: bringing 3815 S. Ashland across the finish line and providing a vital piece of infrastructure to a city that sorely needs it.
“We’re proud of what we’re building,” Finley said. “And we’re confident it’s going to serve the needs of Chicago’s food and logistics industry for decades to come.”
Colliers report: Industrial sales activity on the rise
By Dan Rafter
Investors are still sinking their dollars in U.S. industrial real estate, even with the threats of tariffs and other uncertainties facing the country's economy.
That's the most recent news from Colliers, which recently released its May Capital Markets report charting the performance of the main commercial real estate sectors in the United States.
And in good news for industrial real estate professionals, Colliers reported that the U.S. industrial sector remains a favored destination for investment dollars. This isn't overly surprising: U.S. real estate, despite its challenges, is still known as one of the safest investments. And the industrial sector, though not nearly as hot as it was during the days of the COVID pandemic, remains a solid performer.
How strong is the country's industrial sector? Colliers reported that the U.S. industrial sector recorded $7.9 billion in sales volume in March. That's a solid figure and is up 27% from a year ago and up 26% from February.
"The U.S. industrial sector recorded $7.9 billion in sales volume in March. That's a solid figure and is up 27% from a year ago and up 26% from February."
Other U.S. commercial sectors recorded strong performances, too.
The hospitality industry saw strong sales volume, too, recording $2 billion in sales volume in March. That is up 9% from March of 2024 and up 30% from February of this year.
The U.S. multifamily sector saw $9.2 billion in sales volume in March, up
20% on a year-over-year basis. That sales volume, though, was down 10% when compared to February.
The U.S. retail sector held steady, too, registering $4.5 billion in sales volume in March, up 30% year from the same month a year earlier. That figure was down 40%, though, from February.
The big laggard? Not surprisingly, it's the office sector, which continues to face challenges from the work-fromhome movement. According to Colliers, the U.S. office sector recorded $3.5 billion in sales volume during March. That is down 67% from the same month a year earlier and down 11% from February.
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MERIDIAN DESIGN BUILD
9550 W. Higgins Road, Suite 400 Rosemont, IL 60018
P: 847.374.9200 • F: 847.374.9222
Website: meridiandb.com
Key Contact: Paul Chuma, President; Howard Green, Executive Vice President
Services Provided: Meridian Design Build provides construction and design/build construction services on a national basis with a primary focus on industrial, office, medical office, retail and food and beverage work.
Company Description: With a team of in-house professional project managers, Meridian has extensive experience coordinating the design and construction of new buildings, tenant improvements, and additions/ renovations from 15,000 square feet to 1,000,000+ square feet. Meridian Design Build has been a Member of the U.S. Green Building Council since 2007.
Notable/Recent Projects: Venture Park 47, Huntley, IL - 729,800 sf speculative industrial facility for Venture One Real Estate. Lion Electric, Joliet, IL - 928,500 sf electric bus / medium duty truck assembly plant for Clarius Partners. Greenwood Truck Terminal, Greenwood, IN - 125 door truck terminal on 43 acres for Scannell Properties.
PRINCIPLE CONSTRUCTION CORP.
9450 West Bryn Mawr Ave., Suite 120 Rosemont, IL 60018
P: 847.615.1515 | F: 847.615.1598
Website: pccdb.com
Key Contacts: Mark L Augustyn, COO, maugustyn@pccdb.com, James A. Brucato, President, jbrucato@pccdb.com
Services Provided: Since 1999, Principle Construction Corp. has been a leading design-build general contractor serving the industrial markets of Chicago Metro, Southern Wisconsin, and Northwest Indiana. We specialize in designing and constructing exacting solutions for our clients, including:
• Built-to-Suit Facilities • Speculative Facilities • Warehouse and Distribution Centers • Logistics and Cross-Dock Facilities • Industrial Outdoor Storage • Industrial and Manufacturing Plant • Tenant Improvements • Expansions and Additions • Food Processing Facilities • Specialty Projects
Recently Completed Projects include:
• 8,205 SF animal shelter for Heartland Animal Shelter, at 586 Palwaukee Dr., in Wheeling, IL.
• 12,560 SF showroom and outdoor pool park for Doheny Enterprises, at 5307 Green Bay Rd., in Kenosha, WI
• Phase 1 renovation project for SMW Autoblok, at 285 Egidi Dr., Wheeling, IL
Services Provided: Victor Construction Co., Inc. manages projects from ground-up site developments to interior buildouts, specializing in retail, industrial, and commercial markets.
Company Profile: Established in 1954, Victor Construction Co., Inc. is a third generation general contractor that specializes in commercial, industrial, and retail construction. Victor Construction is known as one of the most efficient and dependable general contractors in the Chicago metropolitan area and has earned the reputation due to meticulous project management, cost-effectiveness, budget awareness, and prime first-rate workmanship. Commitment to the clients’ goals is what keeps satisfied customers returning to Victor Construction for all of their construction needs—We Build for Your Success!
Notable/Recent Projects: Owens + Minor Distribution – 600K SqFt distribution facility that involved a full LED lighting upgrade, new HVLS fans, 200K SqFt section that required new cooling for medical distribution, an office renovation of 20K SqFt, and a new exterior employee pavilion.
ECONOMIC DEVELOPMENT CORPORATIONS
VILLAGE OF HOMER GLEN ECONOMIC DEVELOPMENT
14240 W. 151st Street
Homer Glen, IL 60491
P: 708.301.0632
Website: HomerGlenIL.org
Key Contact: Janie Patch, Economic Development Director, jpatch@homerglenil.org
Services: Resource center for brokers, developers, site selectors and businesses providing space and property inventory, trade area demographics, site selection assistance, custom tours, coordination through entitlement process, business opening process guidance and retention services.
Demographic Info: Strategic Will County location 25 miles southwest of Chicago with two I-355 interchanges between I-55 and I-80. Average household income of $154,800. Trade area population of 83,000. Prime commercial corridors include Bell Road, 143rd Street and 159th Street (State Route 7). 159th Street is improved with 4 lanes and access to Lake Michigan water and sanitary sewer.
Recent CRE Activity: The Villas of Old Oak (46 ranch duplexes) completing full build out. New food specialty and restaurant openings include South Viet, OneZo Boba Tea, Sultan Sweets and Cervantino’s. Restaurant with drive-thru position available at Homer Glen Bell Plaza with Pet Supplies Plus, Dollar Tree and Taco Bell, SWC 143rd/Bell.
Recent CRE Activity: Double Track Northwest Indiana: $1.6 Billion development reducing train travel to Chicago to 60 minutes; The Franklin at 11th St. Station: $100 Million Development with Residential & Retail Space; “You are Beautiful”/ SoLa: $311 Million Mixed-Use Multi-Family Development with 235 boutique hotel rooms & 174 Luxury Condos; Burn ‘Em Brewing: $3 Million Expansion project with 30 new jobs.
ENVIRONMENTAL/ENGINEERING FIRMS
DEIGAN & ASSOCIATES, PLLC
28835 N. Herky Drive Lake Bluff, IL 60044
P: 847.682.7381
Website: www.deiganassociates.com
Key Contact: Michele Brady, Director Business Development & Real Estate Services, mbrady@deiganassociates.com
Services Provided: The Deigan Group provides client responsive, results oriented environmental consulting and remediation services, with a focus in land-based work, including Brownfield Redevelopment, Power Plant Decommissioning/Redevelopment, Strategic Environmental Planning, Property Assessments and Site Remediation, Compliance/Permitting, Employee Exposure Testing/Safety Monitoring Asbestos Surveys/Mold/Indoor Air Quality, Waste Minimization/ Recycling/ Sustainability Plans, Successful Grant Writing.
Company Profile: A full-service environmental consulting organization specializing in defining environmental business risk and removing environmental uncertainties for property development sites. Our wide range of experience within the environmental industry helps us provide realistic cost-saving strategies for our clients with the goal of reducing their overall environmental liability and obstacles to redevelopment.
REAL ESTATE LAW FIRMS
REINHART BOERNER VAN DEUREN S.C.
1000 N Water Street, Suite 1700 Milwaukee, WI 53202
P: 414.298.1000
Website: reinhartlaw.com
Key Contact: Joseph Shumow, Shareholder, jshumow@reinhartlaw.com
Services Provided: Reinhart is a full-service, business-oriented law firm that delivers innovative, value-added solutions for today’s most important real estate needs, including land use and zoning; tax-incremental financing; tax credits; leasing; construction; and condemnation and eminent domain issues.
Company Profile: With the largest real estate practice in Wisconsin and offices throughout the Midwest and across the country, Reinhart’s attorneys offer clients customized real estate insight rooted in broad knowledge and deep experience to help you capitalize on opportunities no matter where you do business.
SARNOFF PROPERTY TAX
100 N. LaSalle St., 10th Floor Chicago, IL 60602
P: 312.782.8310
Website: sarnoffpropertytax.com
Key Contact: James Sarnoff, jsarnoff@sarnoffpropertytax.com P: 312.448.5337
Services Provided: Since 1986, Sarnoff Property Tax has been a leading and recognized law firm concentrating solely in the field of property taxation. We help client’s secure favorable taxes in Illinois through property tax appeals, incentives and consulting.
Company Profile: Sarnoff Property Tax’s clients include Owners, Developers, Managers, REIT’s, Fortune 500 Companies, Private Equity Firms, etc., in connection with commercial property, high-rise and lowrise apartment buildings, condominium associations and single-family home portfolios.
WORSEK & VIHON, LLP
180 North LaSalle Street, Suite 3010 Chicago, IL 60601 P: 312.917.2307 P: 312.917.2312 | F: 312.596.6412
Website: wvproptax.com
Key Contacts: Francis W. O’Malley, Managing Partner fomalley@wvproptax.com; Jessica L. MacLean, Partner jmaclean@wvproptax.com
Services Provided: Worsek & Vihon, LLP represents tax payers in Illinois by limiting their property tax liabilities through ad valorem appeals. We have over 40 years of experience and can handle basic to the most complex assessment issues while offering the dependable, personalized attention our clients deserve. We have experience representing owners of all property types. In addition to filing thousands of appeals with the Cook County Assessor, we have been involved in numerous proceedings before various Boards of Review, the Illinois Property Tax Appeal Board, and the Circuit Court of Illinois, and have appeared before the Illinois Appellate and Supreme Courts.
Company Profile: Worsek & Vihon LLP, is a team of experienced attorneys singularly focused on real estate tax law. The firm is dedicated to minimizing property tax liabilities through strategic tax portfolio management, well-researched, creative appeal preparation and aggressive advocacy.
