The developer converting Allstate’s former 232-acre corporate headquarters campus north of Chicago into modern warehouses has landed its first tenant, a startup that plans to open one of the world’s largest commercial cultivated meat production facilities.
Upside Foods has leased 187,000 square feet within The Logistics Campus, which Dermody Properties is in the early phases of building as it demolishes office buildings on the Sanders Road site in Glenview, Illinois, the companies said in a statement.
Called Rubicon, the building is scheduled to be constructed at 2600 Sanders Road. Berkeley, California-based Upside Foods said it will invest $141 million on the project, creating 75 jobs when it opens by 2025. Upside will receive about $15 million in public subsidies, the company told CoStar News.
Upside’s building is part of the first phase of construction already underway. It is the first tenant to commit to space within a complex where Dermody Properties, in the coming years, plans to develop and lease up more than 3.2 million square feet of new industrial space.
Dermody’s Allstate campus overhaul is part of a national push by developers of warehouses and other facilities, such as data centers and entertainment venues, to repurpose or knock down and replace outdated offices. Suburbs north of Chicago, such as Glenview, have been at the epicenter of the trend.
"Establishing our plant in this region allows us to tap into a remarkable talent pool, a thriving innovation ecosystem, and a notable history of meat production,” Dr. Uma Valeti, CEO and founder of Upside, said in the statement. He is a cardiologist. “We are grateful for the collaboration and partnership that we have built at the state, county, and local levels in our site selection process.”
Offices to Warehouses
Dermody’s project is a big example of a national movement in which outdated suburban office campuses are giving way to last-mile distribution space.
Such facilities are helping retailers and logistics companies move closer to homes where online orders are delivered, while replacing some of the excess office supply that has emerged because of remote-work trends since the onset of COVID-19 in early 2020.
Reno, Nevada-based Dermody began the project immediately after buying the campus for $232 million in late 2022.
While many office-to-warehouse projects are expected to target e-commerce companies as tenants, the suburban Chicago site will be used for growing meat from animal cells, starting with ground chicken products, according to the statement.
Cultivated meat is a new method to create meat without slaughtering animals.
Engineered in labs using animal cells, cultivated meat is different from plant-based products made by companies such as Beyond Meat and Impossible Foods.
Other startups are developing cultivated meats to compete with Upside.
Upside has a production facility and innovation center in Emeryville, California. It also has offices in Berkeley, California, and Madison, Wisconsin.
The Chicago-area lease comes after Upside acquired Wisconsin-based Cultured Decadence last year.
Its new facility will allow Upside to scale up its production, housing cultivators with capacities of up to 100,000 liters.
Rubicon will have an initial capacity to produce millions of pounds annually, with the potential to expand to more than 30 million, the company said in the statement.
Valuation of $1 Billion
Upside landed $400 million in a fundraising round in April 2022, valuing the company at more than $1 billion.
Since its start in 2015, the company has raised a total of $608 million from investors, including the Abu Dhabi Growth Fund, Bill Gates, Richard Branson and Tyson Foods.
The company was the first to receive U.S. Food and Drug Administration approval, and it achieved the first-ever cultivated meat sale when its lab-grown chicken was served at Michelin-rated restaurant Bar Crenn in San Francisco in July.
“This new facility is a significant investment in our communities — creating new good-paying jobs while advancing our ambitious clean energy goals to create a more sustainable future,” Illinois Gov. J.B. Pritzker said in the statement. “We also congratulate Upside Foods on their recent milestone of being the inaugural company to commercially sell cultivated meat in the United States. Their pioneering leadership makes them a perfect fit for the region.”
The overhaul of the campus includes another proposed project by Dermody in Glenview, where it would like to buy and raze two more office buildings on more than 18 acres combined. Dermody wants to build one warehouse on that site.
In another high-profile proposal, Chicago-based Bridge Industrial has backed off plans to buy and redevelop medical products company Baxter International’s more than 100-acre campus in Lake County into warehouses after a backlash from neighbors.