“It’s extremely difficult,” says Darcie Fankhauser, regional partner in the Chicago office of Houston-based Transwestern Development. “Imagine having 30+ salespeople, all looking for different things, different timeframes, different prices.”
But land has become so scarce and acquisition costs have risen so much that more and more developers are willing to give it a try. Fankhauser estimates that land in DuPage County near O’Hare sells for around $20 a square foot today, up from about five years ago.
Seefried is one such developer, buying six residential plots in Devon last year for his industrial development, located in Elk Grove Village. In Wood Dale, about a mile south of Mohawk Terrace, Transwestern bought 30 of the approximately 100 homes in the Mohawk Manor subdivision, demolished them, and built a 301,000 square foot warehouse in their place. Nippon Express, a Japanese logistics company, recently moved into the building.
Transwestern doesn’t stop there. The developer is in the process of buying out other Mohawk Manor owners to the south. He signed a contract to pay in the “$400,000 range” for a house in the subdivision where Colleen McCormick lives with her boyfriend, likely double what a residential buyer would pay, she said. Closing is scheduled for June 1.
McCormick isn’t sure how many homes Transwestern is buying, and Fankhauser refuses to discuss the developer’s plans for Mohawk Manor.
“Some people feel like they’re being kicked out,” McCormick says. “Some are absolutely ready to go.”
Up the street in Mohawk Terrace, Katherine Anderson says she and her husband, Arthur Eichorst, are “100% happy” to be leaving and starting a new life in Las Vegas. ML paid $435,500 for their one-story ranch on Indian Hill Drive, where she raised eight of her 11 children. They received enough money from the sale to buy a condominium in Las Vegas without a mortgage.
If they sold their Bensenville home to a residential buyer, “we would have had a hard time getting what we owed,” Anderson says. She and her husband owed $256,000 on their mortgage, she said.
Mohawk Terrace was a logical target for an industrial developer, surrounded on all sides by large industrial buildings. San Francisco-based Digital Realty runs a massive data center across Devon Avenue.
ML moved in the fall of 2019, sending letters to Mohawk Terrace residents expressing interest in buying them out, says Fiore, who served as a liaison between the developer and his neighbors.
But the housing estate also caught the attention of Prologis, which quietly bought a few houses in the housing estate while ML was still negotiating with other residents, he says. It was a shrewd move by Prologis, giving the company leverage over ML by disrupting its plans.
ML “was a little upset about that,” Fiore says, but the two companies eventually agreed to develop the site jointly. ML is building two warehouses totaling 605,000 square feet on the east side of the site, and Prologis is building two others comprising 669,000 square feet on the west side.
Representatives of ML and Prologis decline to comment.
ML is already courting tenants for its two warehouses. He expects to break ground on the project this summer and finish construction next spring, according to a March announcement from ML.
The project “is strategically located in the center of the O’Hare submarket and will provide excellent access to all areas of Chicago via all major highways,” the announcement reads. It’s also “only minutes from both freight entrances to O’Hare”.
Many Mohawk Terrace homeowners are happy with the prices they’ve received for their homes, but others are a little jealous of neighbors who pocketed more than they did. Some are scratching their heads at the $1.7 million Fiore received for her home, which is $472,000 more than the second-highest amount.
Although Fiore worked closely with the developers to orchestrate the entire transaction, he says he and the developers performed well when selling his property. He says he was not rewarded with a higher price for his role, but negotiated a contract as his neighbors did.
“It’s something that I put forward and felt I did for the community,” Fiore said. “At the end of the day, everyone negotiated their own contract.”
Note: This story has been corrected to include information about Prologis’ plans for the property.