The Logistics Campus, a sprawling north suburban industrial development on the site of the former Allstate headquarters, has landed its first tenant since completing the initial phase of construction in October.
HuFriedyGroup, a century-old, Chicago-based dental equipment manufacturer, has agreed to lease a full 326,278-square-foot-building – the largest of five warehouses that have sprung up along the Tri-State Tollway in Glenview.
Terms of the lease, which was announced last month, were not disclosed. A HuFriedyGroup spokesperson did not respond to a request for comment.
Dermody Properties, a Nevada developer, bought the former Allstate campus for $232 million in 2022, with plans to build one of the largest urban logistics developments in the U.S. on the 232-acre site, which was annexed into Glenview.
The transformative $500 million project calls for a 10-building, 3.2 million-square-foot logistics park. The first phase of five massive warehouses was delivered Oct. 1.
But amid declining demand for logistics facilities in the post-pandemic industrial landscape, the development has gotten off to a very slow start, with 1 million square feet of vacant warehouse space available through much of the fall and winter.
California-based Upside Foods was announced in September 2023 as the site’s first tenant after signing a long-term lease for 187,000 square feet to build out the first large-scale cultivated meat plant in the U.S. But those plans were put on hold last year, with no target date for launch.
Technically the second tenant announced, HuFriedyGroup may be the first to actually move in.
Founded in 1908 by Hugo Friedman, Hu-Friedy became a leading manufacturer of dental instruments. The Saslow family purchased the Chicago-based company in 1959 and ran it for 60 years. In 2019, New Jersey-based Cantel Medical bought the company for $775 million, merging it with other dental manufacturers, renaming it HuFriedyGroup and maintaining its Chicago headquarters.
HuFriedyGroup’s current manufacturing headquarters is located at 3232 N. Rockwell St. in Roscoe Village on the city’s north side. The company will be “phasing into the building” at 2501 Sanders Rd. in the Glenview development, Neal Driscoll, Midwest region partner at Dermody, said in an email Thursday.
Driscoll declined to give a timetable for the move, referring those logistical questions to HuFriedyGroup.
While Dermody has acquired a major tenant to fill its largest building, it has four other warehouses and nearly 700,000 square feet available for lease at the Logistics Campus, in what is still a challenging industrial market.
Demand for industrial space in the Chicago market declined significantly in 2024, ending the year with a 5.6% vacancy rate and the lowest new development pipeline in more than a decade, according to a fourth quarter report by Transwestern.
Industrial vacancy in northern Cook County, where the Glenview Logistics Campus has been trying to break new ground, was among the highest in the Chicago market at 7%, according to the report.
About a third of the 19.3 million square feet of industrial space under construction is south and west of the city, in the I-55/I-80 and I-88 freight corridors, according to Transwestern. There is no new construction underway in northern Cook County.
Meanwhile, available sublease space nearly doubled in 2024 to 16.4 million square feet, according to the report, another sign of a sluggish Chicago industrial market.
Transwestern projects vacancies will continue to rise in 2025 amid weakening demand.
On Thursday, Dermody announced it had acquired a 40-acre site along the I-55 corridor in southwest suburban Romeoville, which it plans to develop into a 460,428-square-foot logistics facility. The company is set to break ground this spring, with completion slated for the first quarter of 2026.
Despite the slow start at Dermody’s much larger north suburban logistics development, Driscoll remains optimistic that demand will eventually catch up with supply, and the second phase may soon begin to rise in Glenview.
“We have a pretty robust prospect list, with a handful of larger tenants looking at The Logistics Campus because there are so few options for Class A space in the area,” Driscoll said in the email. “Based on the prospect activity, we’re very confident construction on additional buildings could begin this year if the local market continues its current pace.”
rchannick@chicagotribune.com
