NORTHBROOK, ILL. — Dermody Properties has agreed to buy the metro Chicago headquarters campus of insurance company Allstate Corp. (NYSE: ALL) for $232 million. The purchase agreement is expected to close in 2022.
The buyer, a Nevada-based industrial development and investment firm, plans to redevelop the 186-acre campus, which is located north of Chicago in Northbrook, into a Class A logistics and distribution hub.
Doug Kiersey, president of Dermody Properties, said in an interview with REBusinessOnline that the preliminary redevelopment plan, which is subject to change based on tenant demands, currently calls for the delivery of approximately 3.2 million square feet of industrial space and a total capital investment of more than $500 million.
Kiersey also discussed at length the aspects of the site that his firm found most appealing, including its location within a major population zone, its scale and its existing onsite and offsite infrastructure.
“This particular site fits geographically into an area that can serve a lot of customers in a very short period of time,” he said. “Within a 10-mile radius, there are a lot of rooftops for companies to serve their customers. The site also represents an unusual combination of infill location and scale — two factors that typically work against each other.”
“In addition, we have offsite infrastructure — roads, traffic signals, turn lanes and ground infrastructure — that was built for the scale of Allstate’s occupancy,” continued Kiersey. “Onsite, we have stormwater retention ponds, utilities and other pieces of infrastructure that we hope to be able to incorporate into our redevelopment.”
In a statement, Allstate said that the decision to sell the 2 million-square-foot campus, which opened in 1967, was prompted by shifting patterns in the office work environment, specifically the growing tendency of employees to voluntarily work remotely when given the option. The company plans to maintain its office in downtown Chicago.
Allstate’s office campus in metro Chicago currently spans about 2 million square feet across 186 acres.
Allstate’s stock price opened at $114.48 per share on Monday, Nov. 29, the day that the purchase agreement was announced. The stock price is up about 10 percent from $103.28 per share a year ago.
— Taylor Williams