An industrial developer has a contract to buy medical products company Baxter International’s 101-acre headquarters, likely setting up a second conversion of a massive Fortune 500 corporate campus in Chicago’s northern suburbs as part of a national trend.
Bridge Industrial plans to buy the campus in Deerfield, Illinois, which Baxter put on the market for sale as a redevelopment play last spring, according to people familiar with the deal.
If the deal is completed and the Chicago-based warehouse developer wins zoning approval for a redevelopment, it would be the second recent high-profile example of a sprawling suburban office campus being demolished and replaced with new warehouses.
Late last year, Nevada-based Dermody Properties began demolishing buildings on the 232-acre former Allstate headquarters campus in Glenview, Illinois, where it plans a 10-building logistics campus after buying the site from the insurance giant for $232 million.
Outdated, sprawling suburban office campuses are being eyed for similar conversions in other areas of the country, including plans to redevelop 62 acres of Novartis’ U.S. headquarters in New Jersey into industrial space. Also in New Jersey, the former Toys R Us corporate campus is expected to be redeveloped into a mix of uses that is not expected to include traditional offices.
Older office campuses have become coveted by industrial developers in recent years as office demand slackened nearly three years into COVID-19 and warehouse demand soared. Leasing now has been slowing amid rising interest rates and a wobbly economy.
Various Property Types
Offices aren’t the only type of real estate targeted for conversions to industrial space. In another Chicago-area deal, short-term warehouse space provider Cubework recently bought a former Sears store within a mall in Orland Park, Illinois.
A sale price for Baxter’s campus could not be determined, and Bridge Industrial’s specific plans for the site are unclear.
It’s also unclear where Baxter’s top executives will be based if the property sale is finalized as expected.
“We can confirm that we have identified a prospective buyer for our current Deerfield property and will work with them on due diligence activities while we conduct a search for a new headquarters,” Baxter said in an emailed statement to CoStar News. The statement did not name the buyer or potential locations for a new Baxter headquarters.
Bridge executives did not respond to requests for comment.
Bridge’s deal for the property was first reported by Crain’s Chicago Business.
The campus at 1 Baxter Parkway is along Lake Cook Road and interstates 94 and 294 in Lake County, about 25 miles north of Chicago’s Loop business district.
Built in the 1970s, the campus has 10 low-rise buildings with a combined 645,688 square feet of office space, according to marketing materials from JLL, which is representing Baxter in the sale. The campus has 1,479 parking spaces, according to the materials.
Other companies headquartered nearby include Walgreens and Horizon Therapeutics. Another major company, Caterpillar, recently moved its headquarters from Deerfield to Irving, Texas.
Bridge develops industrial space throughout the world, including an ongoing redevelopment of an 87-acre former Navistar International truck engine factory in Melrose Park, Illinois, not far from O’Hare International Airport. Before even breaking ground last year, Bridge signed two leases for almost 1.4 million square feet in the two-building, $250 million project.
For the Record
Baxter is represented in the sale by JLL broker Scott Miller.