Distribution Realty Group is moving ahead with 3.5 million square feet of new speculative industrial developments in Chicago, Indianapolis and Memphis. The projects will be developed on behalf of the company’s DRG Industrial Fund I.
In Indianapolis, construction has begun on Reagan Logistics Park, a two-building, 1 million-square-foot campus in Indianapolis’ Southwest/Airport submarket. When this project is completely built out, DRG’s Indianapolis presence will total more than 1.3 million square feet adjacent to Indianapolis International Airport, home of the country’s second-largest FedEx hub.
In Memphis, DRG has acquired 187 acres adjacent to its recently delivered 810,225-square-foot Stateline West Distribution Center. The two buildings planned on the new land, known as Stateline North, will bring the park’s total capacity to more than 3 million square feet in a location 8 miles from the FedEx global hub.
In metropolitan Chicago, construction is underway on a two-building speculative project at Duke Realty’s Meridian Business Campus in Aurora, in the I-88 Corridor submarket. The 215,000-square-foot project is scheduled for completion in the first quarter of 2022. Plans for the project, which is in partnership with Crow Holdings Capital, were initially announced this past spring. Since 2015, DRG has acquired and developed 14 buildings in the Chicago area totaling more than 1.86 million square feet.
DRG did not immediately respond to Commercial Property Executive’s request for additional information.
Steady low vacancies
Distribution Realty Group was founded in 2013 as a private industrial real estate company with offices in Chicago and Nashville. DRG has acquired and developed more than 7.6 million square feet of industrial properties representing more than $540 million since its inception.
Regionwide, the Midwest saw its average industrial vacancy decline by 0.2 percent from the end of 2020, to 3.8 percent at the end of the second quarter, according to a report from CBRE. A total of 95.2 million square feet was under construction in the second quarter, of which 44.7 percent was preleased.
Midwestern markets had 52.2 million square feet of industrial leasing in the second quarter, of which more than two-thirds was new activity, also per CBRE.