AMB WILLE DISTRUBUTION
“The Missner Group’s knowledge and experience in the industrial market lent itself well to the requirements of our clients. Your team’s commitment to a successful project, from beginning to end, makes you a valuable partner to our organization and we would recommend The Missner Group to other companies in need of development or construction expertise.”
James McGill SVP, Development, Central Region AMB Property Corporation
The
Details
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Des Plaines, Illinois
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253,400
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Warehouse/Distribution
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Speculative Development
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$20 Million
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Harris Architects, Inc.
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A joint-venture between The Missner Group, LLC and AMB Property Corporation
Project Overview
The Missner Group entered a contract for the purchase of 10 acres of land with the intent to develop a 250,000 square foot speculative industrial building. The site was located in the O’Hare submarket of Chicago, one of the most sought-after industrial development locations in the country.
Challenges
The property consisted of three separate parcels that were sold to The Missner Group by the City of Des Plaines. At the time, the City did not own the sites and was acquiring them through eminent domain, a process that ultimately took three years. As a result of these delays, market demand was less certain due to the unknown timing of the development.
The consolidated site also presented significant physical challenges, most notably with subsurface conditions. Previously used as a concrete dump and borrow pit during construction of the Northwest Tollway, the site could not support a conventional foundation system typical of most industrial buildings. Additional challenges included environmental considerations, utility relocations, an existing cell tower, and securing required zoning and tax incentive approvals.
When the project commenced in spring 2007, the entire development was pre-leased to Coaster Company of America, a national furniture distributor. The lease included a termination right if the building was not ready for occupancy by January 2008.
Solutions
During the delay in acquiring the development sites, The Missner Group sought a partner to share development risk and capitalize on the significant land appreciation that occurred during the condemnation process. The firm successfully negotiated a joint venture with AMB Property Corporation (now Prologis), which at the time was the largest owner of industrial real estate in the O’Hare market.
Once the AMB/Missner venture was established, the development team assisted the City of Des Plaines in the condemnation settlement process and ultimately purchased the land from the City. As part of these negotiations, Missner secured proper zoning and 6B tax status, reducing the real estate tax burden by 50% for 12 years. The agreement also included approval for an additional tollway frontage billboard, which was later leased to a national operator. Prior to construction, required utility and cell tower relocations were completed, and approval was secured from the Illinois EPA.
The 253,000-square-foot warehouse and distribution facility includes 18,000 square feet of build-to-suit office space for Coaster, 30-foot clear ceiling heights, and 55 truck dock positions. During construction, The Missner Group utilized dynamic compaction to stabilize subsurface voids, eliminating the need for a structural slab and saving more than $1 million. A fast-track construction approach was implemented to meet Coaster’s lease requirements and achieve the targeted occupancy date.
Results
The project was completed in December 2007, allowing Coaster to occupy the facility on schedule. Through the foresight of the development team, the building was sold in January 2008, just prior to the real estate market collapse. The project was subsequently awarded Industrial Redevelopment of the Year by the Chicago Chapter of the National Association of Industrial and Office Properties (NAIOP).