Tag Archives: redevelopment

When you can build a suburban warehouse where an office building used to stand

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With less demand for suburban office buildings, the void is being filled with warehouses. One example from the northern suburbs of Chicago:

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The old Allstate campus was a traditional suburban office environment with lush landscaping, reflecting ponds and thousands of workers. That property now is called the Logistics Campus, a massive industrial development underway in Glenview…

“The ability to put modern industrial in the middle of an established community — it’s unique in the sense that there will be very few other sites of this size that can replicate what we’re doing,” said Neal Driscoll, Dermody’s Midwest region partner.

Development of big-box industrial space in the Chicago region set a record in 2023 with construction of 70 buildings totaling nearly 33 million square feet, according to a recent report by commercial real estate company Colliers International.

The shift to warehouses in the suburbs has been going on for a while. What I noticed in this story was this thought: the unique opportunity to put warehouses (“modern industrial”) in “an established community.” Translation: many upscale suburbs would not chose to put in warehouses. They might generate noise and traffic. They do not provide many white-collar jobs. They are not attractive buildings.

But, empty office parks are also not desirable. Suburban offices or headquarters for Fortune 500 companies are attractive: quality jobs, status, most likely a glass building. No one working in these buildings and companies leaving these spaces leads to issues.

Thus, warehouses might now be found in communities that would not necessarily select them if they had such options. A set of warehouses might be preferable to vacant office buildings or unwanted office buildings. Figuring out the best land use or zoning in a suburb can be less about the most ideal use of land but rather about the possible alternatives at that moment.

Seeing teardowns and infill homes throughout DuPage County

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While working on a project, I noticed something while driving through a number of DuPage County communities: there are teardown homes everywhere. They are not just limited to desirable downtowns; they are spread throughout numerous residential neighborhoods. They are often easy to spot: much larger than adjacent homes and with a particular architectural style with stone or fake stone bases, lots of roof peaks, and plentiful garage space. Some could be categorized as teardown McMansions. (Some of these homes might be infill homes where homes were constructed on empty land.)

These teardowns follow some of the patterns I found in over 300 teardowns in Naperville. The architecture and design is similar. The homes are often located next to older homes, often from the postwar era, from the twentieth century.

One difference is that these teardowns are spread throughout communities. In Naperville, teardowns tended to cluster near the desirable downtown area. In some of the communities I drove through, teardowns and/or infill homes are all over the place. Some of these communities do not have downtowns like Naperville and have housing stocks of different ages. It was not unusual to see a teardown suddenly in a neighborhood on the edge of a community when in Naperville the teardowns tend to cluster in particular neighborhoods.

In a county that is largely built out and with suburbs now 50-170+ years old, there will be more opportunities for property owners, builders, and developers to tear down old homes and construct new ones. My sense is that while communities may have regulations about what can be rebuilt, the general atmosphere is in favor of these new homes as long as there is interest and resources to make it happen.

A shopping mall left for walkers, a few stores, and future plans

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I recently visited a nearly empty shopping mall in a nearby suburb. The suburb just recently bought more of the property in the hopes of redeveloping the mall into something more productive for the community. On this visit, here is part of what I saw in the mall:

On this winter day, there were at least a few people walking laps around the mall. Others sat in the empty food court. Security walked around.

The directory was about 5-6 years old. At that point, the mall still had a lot of retailers.

In the background of the image, you can see the Sears sign. Almost all of the anchor stores are long gone. Most storefronts are empty. The movie theater is shuttered.

The decline of this mall did not happen immediately. Combine online shopping, lots of shopping options in the Chicago region, and COVID-19 and you get a nearly empty mall. And it will take years to redevelop the property and incorporate the new elements into the community.

What used to be in suburban downtowns: banks, grocery stores, churches, and more

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I recently read about redevelopment plans in part of a suburban downtown in the Chicago area: a shift from banks to other land uses. Here is what would be built in the future:

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Hundreds of apartments, a 600-vehicle parking garage and new retail and entertainment space are among an array of possibilities for the redevelopment of a key area of downtown Mundelein known as the “Bank Triangle.”

Suburban downtowns served different purposes in the past. They were economic and social centers in the midst of less developed suburban territories. Businesses located there sold more everyday goods including food and clothing. Banks and churches were there.

Now, suburban downtowns want mixed-use properties that match up downtown residents with restaurants, particular kinds of retailers, and entertainment and cultural options. These land uses bring in residents and money. They are perceived to be vibrant land uses. The other land uses have moved elsewhere or have downsized; banks have consolidated and have fewer branches, retailers are in strip malls and shopping malls, and more people moved to sprawling subdivisions further removed from downtowns.

This shift highlights a new version of suburban downtowns. They are now places to live and go to, not necessarily centers of community life. They have particular land uses and not others. And these will likely to continue to change in the future.

Suburbs buying vacant malls to try to simplify redevelopment process

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Two Chicago suburbs are purchasing mostly empty malls with the goal of redeveloping the properties:

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West Dundee and Bloomingdale officials have similar visions for the mall properties in their towns.

West Dundee sees a mixed-use development with residential, office, retail and entertainment. Bloomingdale’s consultants have drawn up conceptual plans showing residential, commercial and recreational development in place of the mall’s former retail buildings and parking lots.

Typically, villages stay out of the real estate business and leave redevelopment of retail centers to developers. But for West Dundee and Bloomingdale, taking ownership of their malls and clearing some obstacles, such as multiple property owners or restrictive covenants, were deemed essential for future redevelopment.

“Almost uniformly, every developer with whom we spoke stated that the site has too many complications ­— too many owners, too many covenants, too many uncertainties,” Nelson said last year. “The village’s aim is to bring simplicity to the process so reliable developers with established track records will be interested in partnering to reformat the area. Without municipal intervention, that simply won’t happen.”

Two thoughts come to mind:

  1. It is not too surprising that suburban communities want to guide the redevelopment. Suburban residents and suburban community leaders are often picky about what they might want to replace a shopping mall. By purchasing the property, the suburb can choose the developer and the zoning while also setting a vision.
  2. I wonder if this is an instance where a large property owner – the owners of these malls – can afford to sit on these properties for a while to see if there will be a bigger financial return later. I remember reading in the past about parking lots in downtown areas; they are not flashing and they are not the preferred land use but the company who owns that lot can wait until there is significant demand for the property and then make a lot of money on selling the parking lot. Compared to these suburbs, the property owners may be less interested in moving quickly on a redevelopment plan. (This could also apply to recent conversations about suburban office parks and downtown office buildings: even vacant buildings might not need to be sold or redeveloped if an owner can afford to hang on to them.)

What will nearby suburban residents accept for redeveloped office parks?

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Suburban residents often do not like the idea that a nearby office park will soon be a warehouse or logistics center. But, what will they accept?

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If I had to guess, I would go with open space or park space. Suburbanites would like this for multiple reasons: little noise and traffic, increased recreational opportunities, this limits future development on the location, and improved property values. Suburban homeowners do not want properties next to them to have more intensive land uses; they would prefer less activity.

At the same time, this puts communities and these suburbanites in a predicament. These office parks served particular purposes. They brought in tax revenues. They provided jobs. They provided status (particular if a big name company occupied the offices). Empty buildings are an eyesore and wasted opportunity. Warehouse and logistic parks would bring in money and jobs. Parks and open space do not generate their own revenues.

Before resisting everything that could replace suburban office parks, the suburban neighbors might want to consider what they would be willing to accept. Are there land uses that could aid the community and preserve some semblance of residential suburban life? Is there any room for compromise?

“Zombie malls” cost communities while others profit

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A number of American communities have “zombie malls,” shopping centers that continue to exist even if communities wish they would disappear.

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There are hundreds of zombie malls throughout the U.S. like the Berkshire
Mall, more dead than alive. The older, low-end ones have
lost at least half and, in some cases, more than 70% of their value since
the industry’s peak in late 2016, according to real-estate research firm Green
Street…

That’s when Namdar Realty and Mason like to swoop in. The New York-based
real-estate partners are among the most prolific purchasers of U.S. malls. They
make money by buying malls cheap and keeping them going, even as town officials
beg them to pull the plug.

Bare said the community would be better served if the Berkshire Mall was
turned into something more valuable. Ideally, a mixed-use property with housing
and medical offices or educational space, and maybe some retail and
restaurants…

Malls typically sit on large parcels of prime real estate—which often
include nearby buildings such as restaurants as well as large parking lots—that
can be subdivided and sold in parts, sometimes at a value exceeding the
purchase price of the mall. The partners keep the malls open, but cut costs by
appealing their property-tax bills and reducing expenses such as staffing and
maintenance. 

All the while, they continue to collect rent from the mall’s remaining
retailers. When national retailers move out, Namdar Realty and Mason try to
replace them with nontraditional tenants such as call centers, local small
businesses, doctors’ offices and bounce-house venues.

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Here are some of the reasons communities do not like malls surviving in this
state:

-They are not generating the kinds of tax revenues they did as a thriving
mall.

-The land could be generating more revenue if used in different ways.
Communities want to replace the tax revenues of the malls with other revenues.
(And this is a reason housing might not be too appealing to some leaders.)

-A mall in bad repair and/or is partly to mostly empty is an eyesore.
Gleaming and busy malls are a source of pride; struggling or dying malls are
the opposite.

-Outside mall owners may not always be perceived as having the best
interests of the community in mind. Imagine how locals might interpret their
actions: someone is trying to profit off our struggles. They are impeding our
progress just to make money for outsiders.

-Even if malls can be demolished or repurposed, it can be a hard path to
putting new and worthwhile in its place. These outsiders are slowing the
process or making it impossible to move on.

Even zombie malls will meet their fate eventually, either as unprofitable
ventures that are sold and redone or as places that continue to generate
profits. And if they can keep making money, are they really zombies?

SF mall’s fate a sign of “urban doom loop” or suffering from what faces many shopping malls?

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A review of the issues facing San Francisco includes a bit about the Westfield San Francisco Centre:

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Dennis Phillips had recently taken her staff to tour the Westfield San Francisco Centre. “We have to understand the possibilities of that building,” she explained. The mall loomed so large as a harbinger of San Francisco’s struggles that I decided to see the damage myself. When I was growing up in San Francisco, at the turn of the millennium, the opening of the Westfield mall had seemed like the capstone of the city’s rise. Now I expected a ruin – the remnant of a once triumphal age.

As I approached, I found the stretch of downtown around the mall lively and crowded. People in the local office garb of slacks and zip vests brushed past, thumbing their smartphones. In front of the Dawn Club, a storied jazz bar that Sheehy reopened this year, men in suits were playing a game that they called Doomloopin Bowling on a strip of AstroTurf. Inside the mall, which as of now has no closure date, I saw customers flowing from Bloomingdale’s. To my left, a Michael Kors salesperson chatted with a couple as, on my right, young men studied fancy watches in an I.W.C. Schaffhausen. The food court was noisy, and there were no free tables at Panda Express. The grimmest space was on the top floor: a Cinemark whose lease is up in the fall had gone dark early. “They’re closed,” a bored looking guard announced to no one.

In public declarations, Westfield – like Gump’s – laid the blame for its lack of business on the condition of San Francisco’s downtown. But in the past forty years the number of malls in the United States has declined by nearly three-quarters, and a tour of downtown San Francisco today, its streets packed, its bars busy, can seem an odd me-or-your-lying eyes experience.

The closing of retail shops in San Francisco was easy to see culminating in this mall when the mall operator recently handed back the property to the lender. A once thriving mall suffered from vacant properties. Its location was once a very busy part of the downtown between regular floods of downtown workers, residents, and tourists. I have been to this mall at least a few times and it was generally a lively spot where a cosmopolitan canopy might be possible.

But, as noted above, shopping malls everywhere are facing difficulties. Brick and mortar locations are suffering, even in the most vaunted locations. The outlook for shopping malls is bleak as many will not be needed in the future landscape. Numerous malls are trying to transition by adding housing and/or other entertainment options.

Like many places, urban or suburban, what the mall becomes might be more important than whether the mall survives. What becomes of potentially valuable land near an urban core that once generated property and sales tax revenue? What use could be good for residents and the city long-term? This may be harder to envision in urban downtowns where a lot of property might soon be available for new uses.

The ongoing transformation of the Bell Labs site that helped create modern Naperville

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A large office building is coming down at the northwestern corner of Naperville and Warrenville Roads in Naperville. This is not just any office building; this is the site that helped jumpstart Naperville’s growth and status. Here are some details on the changes:

Constructed in 2000 at the northwest corner of Naperville and Warrenville roads, the five-story glass and steel complex at one time was touted as a technological hub with the potential to sustain thousands of jobs.

But with the recent arrival of cranes, excavators and other heavy equipment, a new era is beginning for the 41-acre site that’s part of the city’s Interstate 88 corridor.

Oak Brook-based Franklin Partners — which in April finalized the purchase of 1960 Lucent Lane for $4.75 million — in June received a demolition permit from the city to raze the 500,000-square-foot building and the three-story parking garages on either side…

Discouraged by city officials to develop warehouses on the property, Franklin Partners replied by saying it would seek a technology-based alternative.

I describe this property’ contribution to Naperville in a 2016 article titled “A Small Suburb Becomes a Boomburb” in the Journal of Urban History:

The arrival of a high-status tech company on this suburban plot helped give rise to more white-collar employers in Naperville plus numerous subdivisions.

This property has been ripe for change for a while now. Last year, I noted the amount of available parking behind the facility and a new subdivision back there as well (sign for the development, a new park).

It is too simple to say that the fate of this land could do much to affect Naperville’s future trajectory. At the same time, it is a large parcel of land that once helped affect Naperville’s future. It sounds like the city clearly does not want the property to become warehouses, but what could arise here that contributes to a vibrant future?

Potentially different logics for land: from a church that “nourished thousands” to million dollar homes

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Reflecting on the tearing down of a Catholic church in Chicago, one long-time parishioner describes what will replace the structure:

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It’s a “good’ neighborhood now. And the land that Transfiguration once occupied will be turned into about a dozen single-family homes, where, in an area that was zoned for and still is largely home to two- and three-flats, the starting price of a new house is $1.35 million. Talk to me about the zoning on that one.

This week is the one I dreaded: the physical building, Transfiguration of Our Lord, is being torn down. I held out hope that the building that had welcomed and taken care of so many would be preserved. At the very least, I hoped that the land that nourished thousands of families would house a few more of them in the middle of a nationwide affordable housing crisis. But why build homes for two or three families when you can get rich selling a house to just one?

So the fences have gone up, and the building is coming down.

Processing the closing of a long-time religious congregation can be difficult.

But, there is also a suggestion above that these are two very different uses of land. According to this member, the church nourished families and the community. The church welcomed immigrants. Its school educated kids. The church was a gathering place. Churches in the United States do not pay property taxes, but they can provide services for the neighborhood.

In contrast, the buildings that will replace the church will be expensive single-family homes. These will provide private space for households within a desirable neighborhood. There is money to be made in the developing and selling of the buildings.

This could lead to a question: is land better used for organizations that serve the community or for single-family homes? If people care more about money, creating more real estate is the answer. If people want to emphasize community, there might be room for religious congregations and other neighborhood organizations, but they may need to sustain themselves. Americans value single-family homes and like making money. When congregations close, it is a relatively easy step in many communities to redevelop this land or reuse the buildings in ways that generate money and revenue.