CRE Midwest

I-39 corridor on track for another great year

Carrie-Zethmayr6-14
Carrie Zethmayr

Since the end of 2012, there has been over 38 million square feet of space booked in the I-39 corridor. Throughout 2013 and 2014, over $785 million was invested into new and existing buildings. Since the beginning of the New Year, Carrie Zethmayr, executive director of trade & investment for the Rockford Area Economic Development Council, said that things have been great.

Since the end of 2012, there has been over 38 million square feet of space booked in the I-39 corridor. 2014, and the prior year was even better, as over $785 million was invested into new and existing buildings. With the New Year well underway, Carrie Zethmayr, executive director of trade & investment for the Rockford Area Economic Development Council, said that things have been great for the corridor.

“January was a little bit slow, but now we’re seeing the ramp up happen increasingly the past few weeks,” Zethmayr said. “This week alone I’ve had five projects come in the door for a business attraction project that we’re aggressively working through.”

In regards to the 38 million square feet of space that has been booked in the corridor since 2012, Zethmayr pointed out that the square footage primarily represents commercial and industrial real estate.

“We measure the investments over a two year time period,” she said. “That time frame—2013 and 2014—represents an increase of 81 percent over the previous two years. So we think largely this increase in capital investment comes from the increased competitiveness from the overall U.S. market, as well as an overall increase in manufacturing activity. There is a manufacturing renaissance taking place throughout the U.S., and specifically in the Midwest.”

“A lot of that square footage is manufacturing, warehouse and distribution deals,” Zethmayr continued. “Those deals are both large and small. We have the announcement of AAR that is going to be establishing a maintenance/repair overall operation here in the Rockford market, which will be a major increase in the amount of industry that takes place in the region.”

There are also smaller companies like Ideal Industries, a manufacturer of electric wiring components, in DeKalb, according to Zethmayr, who make a difference.

“Those small, medium sized businesses that are able to significantly increase their capacity is really where we’re seeing a lot of growth in the market,” she said. “So it’s nice to have the large projects that make a lot of headlines, but the small, medium sized companies that are growing and expanding, are where a lot of the growth in job creation comes from in the region.”

Zethmayr noted that she expects this growth overall to continue through 2015, as the corridor has seen an increase in activity—not only with local companies, but companies that are reviving the Midwestern part of the U.S. for its stability, as well as foreign companies that are looking to get into the market.

Things are going well for the corridor, and the council is even re-focusing their marketing efforts to further enumerate the corridor’s success.

“Over the past few years we’ve had a lot of focus in marketing on PR and advertising, which we will continue to do,” said Zethmayr. “In addition to that, in 2014 we re-launched our Festivus event. That’s our annual networking event with corridor members to market properties to the Chicago real estate and brokerage community. So we’re going to continue to do that on an annual basis.”

“We’re also evaluating other types of events that we can host to showcase certain assets of the region, and spend more time doing face to face networking in the Chicago market,” she added. “In essence, we’ve realized—and what we continue to focus on—is that a lot of the deal flow comes as a result of personal relationships, and trust that’s built over time.”

Zethmayr pointed out that it is not only about having the product and the inventory, it’s about being able to pull the resources together to make the deals happen in a way that is best for the client. “So it’s the trust that the product is there, the information is accurate, and that we have a team that will support the project through to the end, and build a reputation for that over time.”

Overall, for 2015, Zethmayr expects a growth in the total number of projects that are closed, as well as a lot of interest in warehouse distribution.

“We’re seeing a change in the warehouse and distribution sector, brought on by how retailers are connecting directly with their customers, and providing a product that’s really causing a change in the industry that will cause them to look for new space,” she said. “The I-39 Logistics corridor has access to the entire I-39 interstate, which can connect distribution centers to the entire Midwest region in the U.S. We’re really well positioned to see growth as those companies start to re-evaluate their distribution strategies.”