Upside Foods Hits Pause at Dermody’s Chicago Redevelopment

Upside Foods has thrown a wrench in Dermody Properties’ redevelopment of the former Allstate campus in Glenview.

About five months after signing a 187,000-square-foot lease at the north suburban site, aiming to open one of the world’s largest commercial cultivated meat production facilities, Upside has put its Glenview plans on hold, citing cost-effectiveness and efficiency, Crain’s reported.

The California-based food manufacturer, which grows meat, poultry and seafood from animal cells, wants to expand its operations on a local level before turning its focus to the Glenview project. It’s unclear when Upside will resume its plans at 2600 Sanders Road, where Dermody is converting the 232-acre office campus into a 10-building, 3.2 million-square-foot logistics park.

“We still plan to move forward with building out our full-scale commercial facility in the future,” an Upside spokesperson told the outlet.

Upon signing its lease, Upside revealed that it will invest $141 million in the development, dubbed Rubicon, and receive $15 million in public subsidies. The company’s Glenview facility was originally slated to open in 2025 and house 75 employees.

Nevada-based Dermody embarked on the project on speculation, without pre-secured tenants, a common practice in the industrial realm. The redevelopment, however, doesn’t appear to be a slam dunk like it once did given shifts in the market.

Oversupply of industrial space has started to emerge in the Chicago-area, following unprecedented demand in the initial years of the pandemic, amid an increase of e-commerce. Developers became overzealous in response to the trend, contributing to a slight uptick in the local industrial vacancy rate, reaching 5.25 percent by the end of 2023, the outlet reported.

Just north of the former Allstate campus, Dermody had similar plans to convert the Caremark Towers office property, at 2211 Sanders Road, into 300,000 square feet of industrial space. But the firm scrapped that project in December, citing “increased costs related to the higher interest rate environment that continues to impact commercial real estate.”

—Quinn Donoghue