Central Steel & Wire, a wholly owned subsidiary of value-added processor and distributor of industrial metals Ryerson Holding Corp., has signed a 900,000-square-foot lease for a build-to-suit office and manufacturing facility in University Park, Ill. Developed by landlord CanAm University Park LLC, the project will become Central Steel & Wire’s new headquarters and operational hub.
According to a recent report filed with the Securities and Exchange Commission, the tenant agreed to a 184-month lease at a $7.3 million annual rent and a 2.25 percent annual rent increase.
The production plant, which will occupy a site at the southeast corner of Central Avenue and West Steger Road, is slated for delivery in May 2023. The development site is some 35 miles south of downtown Chicago via the nearby Interstate 57.
The estimated construction cost is $30 million, the Chicago Tribune reported at the time the project was announced last year.
The lease comes five months after Amazon acquired Central Steel & Wire’s 70-acre plant at 3000 W. 51st St. in Chicago’s Southwest Side. Ryerson Holding sold the facility for $35 million, the Chicago Sun Times reported. The steel processing company had been operating at the facility for over eight decades.
The two companies will be neighbors at the new location just north of the Governor’s Gateway Industrial Park. Last year, Amazon has announced plans to open a 1.2 million-square-foot distribution center at 23257 Central Ave., across the street from Central & Steel Wire’s upcoming facility.
The e-commerce giant plans to open two other fulfillment centers in metro Chicago sometime this year. The properties, totaling more than 1,7 million square feet, are located at 7001 Vollmer Road in Matteson, Ill., and 15924 Western Avenue in Markham, Ill., some 10 miles of each other, CommercialEdge data shows.
Chicago industrial is booming
Amazon is not the only company seizing development opportunities in Chicago. In September, Prime Data Center announced plans to open a data center campus in Elk Grove Village, Ill., totaling 750,000 square feet. The company is set to invest $1 billion in its first project outside California.
With 26.7 million square feet underway as of August, Chicago is second only to Dallas-Fort Worth’s 34.1 million square feet construction pipeline, a recent CommercialEdge report shows. Although the metro is not the most active market relative to its existing inventory, Chicago could have one of its best years to date for industrial project completions.
The metro also recorded the nation’s second-highest transaction volume in the 12 months ending in August, trading approximately $2.3 billion in industrial assets. The figure is remarkable considering that the average price per square foot was relatively low at $70, well below the $106 national average and considerably less than the average per-square-foot prices in the booming Southern California markets. Over the same period, Los Angeles led the way with more than $2.8 billion in traded assets at a price per square foot almost three times higher than Chicago’s average.