Allstate agrees to sell part of campus to developer for $232 million
The Allstate Corporation on Monday announced that it has reached an agreement to sell the majority of its campus in Northfield Township near Northbrook.
The agreement with Dermody Properties would be for about $232 million and would close in 2022, according to a company news release.
Dermody, whose headquarters are in Reno, Nevada, with a Midwest office in Rosemont, is a privately held real estate investment management company that specializes in logistics real estate in the United States.
Founded in 1960, it's invested more than $6.2 billion in all platforms and has acquired and developed more than 100 million square-feet of logistics and industrial facilities through 15 domestic markets.
Specifically, Dermody is "focused on infill, last-mile logistics facilities," said Dermody Properties President Douglas A. Kiersey Jr., a 22-year Chicago resident who said he's driven past the Allstate site "10,000 times, at least."
Kiersey said Dermody is in a contract to acquire 232 gross acres, including 30 acres to the west of Sanders Road that abuts the Dam 1 Woods forest preserve and includes Allstate Insurance West, which is in Prospect Heights. The larger, 202-acre portion is the main Allstate campus, 3075 Sanders Road, from Willow Road south to the residences around Concord Lane in unincorporated Cook County near Northbrook.
"The closing's driven by two things," Kiersey said. "First of all, the operational needs of Allstate as they wind down their operations at the site.
"The second is the process of annexation and entitlement into one of the neighboring communities, we're not sure which. But we know that process will take a while as it works its way through the public system. So we're sort of saying, put all that into the computer and it says 2022 but probably the second half of 2022."
He believes a logistics building -- known traditionally as a warehouse or distribution center before consumer trends shifted and logistics realty and material handling equipment increased in price -- could serve about a million people within a 10-mile radius.
Kiersey said development will be driven by customer demand, but expects that once building starts the entire site would take two to four years to complete. A "very preliminary" site plan includes 11 buildings, 3.2 million square feet, he said.
"We're going to keep as much of the mature landscaping along the (I-294) tollway as we can, and we're going to repurpose as many of the mature trees on the site as we can harvest and move. We want to keep this campus feel. We are going to build logistics buildings, but we want to have a campus feel like it had an office campus feel," he said.
"We're fortunate to have a lot of the infrastructure already in place -- stormwater management, utilities, interior roads, traffic signals, the capacity that was built into the improvements on Willow and then the Willow and I-294 interchange."
Allstate Corporation announced in October it would be selling its campus because many employees are now choosing to work from home.
"Our workers are mostly working remotely and prefer it that way, so we're flexing with them," said Al Scott, Allstate Corporation Financial Communications director.
The company does plan to keep a significant presence in the Chicago area, Monday's release said. Existing Chicago locations are at River Point, 444. W. Lake St., and in the Merchandise Mart.
Crain's Chicago Business reported in early November that Dermody Properties was in negotiations with Allstate to purchase the property.
The sale also will reduce Allstate's real estate expenses and advance the company's Transformative Growth initiative to increase personal property-liability market share, the release stated.
Allstate moved into its campus in 1967, a site then covering 122 acres, Scott said. It now spans 2 million square feet of office space over 280 acres, of which approximately 48 acres are not part of the transaction, Scott said.
Asked about any municipal involvement by Glenview, which borders I-294 to the east of the main complex, Community Engagement Manager David Just said: "The village has not been approached by Allstate or any prospective developers about annexing the Allstate property into Glenview. Since this is a private transaction taking place outside of the village, it wouldn't be appropriate for us to speculate or comment at this time."
Northbrook officials did not respond to an email seeking comment.
In 2020 Allstate paid nearly $700,000 to various Cook County taxing districts, including more than $266,000 to West Northfield School District 31 and nearly $208,000 to Glenbrook High Schools District 225, according to the office of the Cook County treasurer.
"We believe that when our project is fully completed that property tax revenue generated from the property will exceed the current revenue. And we believe that that's going to be a benefit to all of the taxing districts that have an interest in the Allstate site," Kiersey said.
"It's going to unfold here over the next months. We're real excited about the project."