Construction to begin at Dermody Properties logistics facility, Chicago

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Dermody Properties is set to break ground on a massive logistics facility in the northern suburbs of Chicago. The Nevada developer closed on its $232 million purchase of the former Allstate headquarters.

The company plans to redevelop the sprawling 232-acre campus along I-294, as a 10-building, 3.2 million-square-foot logistics park. It will reflect both the rise of e-commerce and the shift to remote work, trends that have been accelerated by the COVID-19 pandemic.

The project is expected to cost more than $500 million including land acquisition. It will be one of the largest urban logistics developments in the U.S. Additionally, it will bring new jobs, a new streetscape and vastly different traffic patterns than the former insurance headquarters.

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“This is, ultimately, a sort of an indicator of this new economy we live in,” said Neal Driscoll. He is the Midwest region partner at Dermody. “Everybody wants to order online, to get their product faster.”

Dermody has already had to navigate some logistical hurdles to redevelop the Allstate campus. He started with the annexation of the property into a neighboring suburb. In July, Glenview annexed the entire campus after agreeing to pay Prospect Heights 18% of the property.

Furthermore, sales taxes are collected annually at the logistics park. About 30 acres of the campus were previously located in Prospect Heights.

More on the Dermody Properties logistics facility in Chicago

When fully developed, the logistics park will see about 6,000 vehicle trips per day, or about 75% of what the Allstate campus generated at its peak. While there will be more trucks plying the roadways, travel will be spread out across the day, as opposed to the rush hour traffic jams that used to clog Sanders Road, Driscoll said.

Located on Sanders Road, the Allstate campus had been a corporate fixture in what was previously unincorporated Northbrook since 1967, when it moved its offices from Skokie to a six-building complex near I-294. In November, with most of its nearly 8,000 Illinois employees working remotely during the pandemic, the insurance giant agreed to sell its campus to Dermody.