The latest trend in suburban industrial: Live/work/play settings to woo workers
In recent years, surging e-commerce growth has fueled demand for warehouse and distribution facilities, making industrial space hard to find in many suburban locations. For example, the Chicago area's industrial vacancy rate for third-quarter 2022 was 4.5%, according to NAI Hiffman research, reflecting the sub-5% rates typical in many submarkets. With few space options available, prospective tenants have primarily focused on whether properties simply checked the box in terms of location and building specifications.
But today, with the national unemployment rate at just 3.7%, a competitive hiring market is increasingly prompting industrial users - many of which invest heavily in job training - to think beyond basic space needs. They are also evaluating facilities through the lens of what will help them attract and retain employees. This is achieved not only through on-site amenities, as is the case in traditional office buildings, but also through nearby retail and recreational offerings that are accessible to workers before or after their shift, or during breaks throughout the day.
The trend is evident in the next generation of industrial developments in Chicago's northwest suburbs, including The Canterfield Corporate Campus in West Dundee, where my firm, NAI Hiffman, is currently brokering land for development. Located on a bluff 100 feet above the Fox River, the 157-acre site offers panoramic river valley views and a layout reminiscent of a corporate campus - complete with curved roads, pedestrian and bike paths, and buildings with large setbacks - that doesn't feel anything like the typical industrial park. The campus has already attracted two building developments: a 250,000-square-foot build-to-suit distribution center for Reyes Coca-Cola Bottling and a high-end, 254,830-square-foot speculative facility by Transwestern Development Company.
The bucolic setting of Canterfield was inspired by the Haeger family, who owned this land for three generations and wanted to honor that legacy by creating a development that complemented adjacent natural areas. Their vision for a campus environment offering industrial/flex office sites is already resonating with companies looking for corporate offices and/or warehouse space that will be a draw for employees. The ability to take in natural vistas through windows and walk along scenic trails over lunch helps users differentiate themselves from other employers - particularly those in urban areas or more conventional industrial settings.
Besides its immediate surroundings, the location of Canterfield in West Dundee itself is yet another selling point for users seeking to offer the live/work/play lifestyle workers desire. The area is home to many single-family home communities as well as the Villages at Canterfield and 1900 at Canterfield apartments, which border The Canterfield Corporate Campus. This gives prospective tenants a large, local hiring pool to tap into, and also serves as an added benefit for workers who don't live nearby. They can take advantage of West Dundee's many community amenities such as its Riverwalk, historic downtown district, numerous public parks and access points for the 40-mile Fox River Trail.
As competition for workers intensifies, I anticipate we'll see this trend play out beyond locating industrial development on sites that offer a live/work/play lifestyle - for example, through the inclusion of additional amenities within warehouses themselves or shared clubhouse-style buildings centrally located on industrial campuses. Just as today's Class A office buildings offer everything from social lounges to fitness centers, so too will industrial developments continue exploring opportunities to provide employees with the amenities and conveniences that enhance not only their time at work, but also their overall lifestyle.