Chicago Q3 2022 | Industrial Real Estate Report

Chicago Industrial Real Estate Market Report 2019

Chicago’s industrial market is still as hot as ever, with an astounding 36.7 million of direct net SF positively absorbed into it year over year. This level of demand formation is almost double the high set for Chicago in 2006 (24 million SF) and almost twice the average levels seen over the past five years. Leasing activity metro wide took a dip so far into 2022 from the highs of 2021, but at the same time, leasing activity is still remarkably strong, adding almost 70 million SF inked deals to the market’s ledger year over year.

A driving force behind Chicago’s industrial sector is its centralized location and unparalleled rail and highway connectivity as the only U.S. city to contain six Class 1 railroads.

These geographic and infrastructural advantages help Chicago play a critical role in the many supply chains for retail, transportation, and manufacturing companies around the globe, helping it consistently maintain its ranking in the top five markets nationally for combined import and export activity. Tenants within these three industries — manufacturing (38%), retail(13%), and logistics (12%) — account for the bulk of Chicago’s leasing activity and positive absorption over the past year.

“The 3rd quarter of 2022 has brought some significant change to the frothy suburban Chicago industrial market.  Despite the rising interest rates, rising rental rates and softening of the economy, there has still remained strong demand, hovering vacancy rates around the 2% mark.  The users are all predicting a blip in the radar but that we will not come to the screeching halt that we did in 2008.” Joshua Hearne, SIOR, Principal.

 

Top Overall Chicago Industrial Real Estate Lease Statistics

12 Month Deliveries (Square Feet): 28.1 million (25.5 million in Q2 2022)
12 Month Net Absorption (Square Feet): 36.3 million (39.3 million in Q2 2022)
Vacancy Rate: 4.1% (4.5% in Q2 2022)
12 Month Rent Growth: 8.0% (9.2% in Q2 2022)

Top Chicago Industrial Leases (Past 12 Months)

1)Property: 4300 Brandon Rd.
Submarket: 
Joliet Area
Leased
SF: 1,160,150
Quarter:
Q3 2021
Tenant:
Amazon
Tenant Rep:
N/A
Leasing Rep: N/A

2) Property: 10601 38th St.
Submarket:
Kenosha East
Leased SF:
1,004,400
Quarter:
Q1 2022
Tenant:
Amazon
Tenant Rep: N/A
Leasing Rep: Lee & Associates

3) Property: 901 Carlow Dr.
Submarket:
South I-55 Corridor
Leased SF:
997,802
Quarter:
Q1 2022
Tenant:
N/A
Tenant Rep:
N/A
Leasing Rep:
JLL

4) Property: 3301 Brandon Rd.
Submarket:
Joilet Area
Leased SF:
990,000
Quarter:
Q3 2022
Tenant:
N/A
Tenant Rep:
N/A
Leasing Rep:
NAI Hiffman

5)Property: 25101 S Ridgeland Ave
Submarket:
Far South Cook
Leased SF:
879,040
Quarter:
Q4 2021
Tenant:
The Home Depot
Tenant Rep:
N/A
Leasing Rep: 
CBRE

Top Chicago Industrial Sales Statistics (Past 12 Months)

Sales Comparables: 1,782 (1,656 in Q2 2022)
Average Cap Rate:
7.5% (7.7% in Q2 2022)
Average Price/ SF: 
$83 ($79 in Q2 2022)
Average Vacancy at Sale: 10% (11.9% in Q2 2022)

Top Chicago Industrial Property Sales

1) Property: Aurora Distribution Center
*Rating:
5
Year Built: 
2013
Building SF:
238,640
Vacancy:
0%
Price (PSF): 
$359,202,000 ($1,505)
Cap Rate: 
Not Listed

2) Property: Wayfair
*Rating: 
5
Year Built: 
2022
Building SF:
1,200,420
Vacancy: 0
%
Price (PSF): 
$127, 336, 050 ($106)
Cap Rate:
3.7%

3) Property: 3851 Youngs Rd.
*Rating:
5
Year Built:
2013
Building SF:
1,006,040
Vacancy: 
0%
Price (PSF): 
$104,440,000 ($140)
Cap Rate:
3.7%

4)) Property: 23700 W Bluff Rd.
*Rating:
 5
Year Built: 
2017
Building SF:
753,000
Vacancy:
0%
Price (PSF):
 $102,500,000 ($136)
Cap Rate: Not Listed

5) 3835 Youngs Rd.
*Rating: 5
Year Built: 
2022
Building SF:
906,517
Vacancy: 0%
Price (PSF): 
$96,750,000 ($2107)
Cap Rate: 
Not Listed

*Rating is 1-5, 5 being the best

Chicago Industrial Construction Projects Statistics

Properties Currently Under Construction: 99
Total Size:
37.5M SF (36.5M SF in Q2 2022) 
Percent of Inventory:
2.9% (2.9% in Q2 2022)
Preleased: 25.5% (35.9% in Q2 2022)

Top Chicago Industrial Projects Under Construction

1) Property: Facebook Dekalb Data Center (Gurler Rd)
Rating*:
5
Building SF:
2,400,000
Stories:
1
Completion:
Q3 2022
Developer/ Owner:
Meta

2)Property: (555 S Pinnacle Dr.)
Rating*:
5
Building SF:
1,267,000
Stories:
1
Completion:
Q4 2022
Developer/ Owner:
Panatonni / Joilet Regional Port District

3)Property: Third Coast Intermodal Hub (SWC Millsdale & Route 53)
Rating*:
5
Building SF:
1,281,120
Stories:
1
Completion:
Q2 2023
Developer/ Owner:
CenterPoint Properties / CenterPoint Properties

4) Property: Elion Logistics Park
Rating*:
4
Building SF:
1,200,000
Stories:
1
Completion:
Q2 2023
Developer/ Owner:
CenterPoint Properties / CenterPoint Properties

5) Property: Third Coast Intermodal Hub (SWC Millsdale & Route 53)
Rating*:
5
Building SF:
1,056,353
Stories:
1
Completion:
Q2 2023
Developer/ Owner:
CenterPoint Properties / CenterPoint Properties

*Rating is 1-5, 5 being the best

Top I-88 West Corridor Industrial Lease Statistics (Past 12 Months)

12 Month Deliveries (Square Feet): 561K (1,700,000 in Q2 2022)
12 Month Net Absorption (Square Feet): 1.1 million (2.8 million in Q2 2022)
Vacancy Rate: 5.3% (8.7% in Q2 2022)
12 Month Rent Growth: 6.8% (8.7% in Q2 2022)

4 & 5 Star Industrial Properties Leasing Activity in I-88 West Corridor (Past 12 Months)

1) Property: Southgate Commerce Center
Rating:
4
Deals:
1
Square Feet:
295,620
Vacancy:
60.0%
Net Absorption:
584,301

2) Property: Butterfield Center
Rating:
5
Deals:
1
Square Feet:
167,860
Vacancy:
25%
Net Absorption:
167,860

3) Property: Prairie Point I (2012 Corporate Ln)
Rating:
4
Deals:
1
Square Feet:
21,460
Vacancy: 
0%
Net Absorption:
0

 

Top South I-55 Corridor Industrial Lease Statistics (Past 12 Months)

12 Month Deliveries (Square Feet): 2.4M (2.6M in Q2 2022)
12 Month Net Absorption (Square Feet): 7.5M (9M in Q2 2022)
Vacancy Rate: 1.4% (1.7% in Q2 2022)
12 Month Rent Growth: 8.1% (9.6% in Q2 2022)

4 & 5 Star Industrial Properties Leasing Activity in South I-55 Corridor (Past 12 Months)

1) Property: 581 Territorial Drive
Rating:
4
Deals:
1
Square Feet: 
448,512
Vacancy:
0%
Net Absorption: 448,512

2) Property: 1501 Remington Blvd.
Rating:
5
Deals:
2
Square Feet: 557,104
Vacancy: 
63.1%
Net Absorption: 365,814

3) Property: 901 W Bluff Rd.
Rating:
5
Deals:
1
Square Feet:
283,920
Vacancy:
15.6%
Net Absorption:
283,920

 

Top O’Hare Industrial Lease Statistics (Past 12 Months)

12 Month Deliveries (Square Feet): 537K (556K in Q1 2022)
12 Month Net Absorption (Square Feet): 1.2M (3.3M in Q1 2022)
Vacancy Rate: 2.5% (2.5% in Q1 2022)
12 Month Rent Growth: 7.5% (9.0% in Q1 2022)

4 & 5 Star Industrial Properties Leasing Activity in South O’Hare (Past 12 Months)

1) Property: Phase 3 (1000-1138 N. Tower Lane)
Rating: 4
Deals:
1
Square Feet:
144,350
Vacancy:
20%
Net Absorption:
144,350

2) Property: 851-853 Expressway Dr.
Rating:
4
Deals:
1
Square Feet: 119,541
Vacancy:
80%
Net Absorption:
119,541

3) Property: 150 Innovation Drive.
Rating:
4
Deals:
1
Square Feet:
64,324
Vacancy:
0%
Net Absorption:
64,324

 

Top I-88 West Industrial Sales Statistics (Past 12 Months)

Sales Comparables: 106 (111 in Q2 2022)
Average Cap Rate:
7.0% (6.9% in Q2 2022)
Average Price/ SF: 
$165 ($98 in Q2 2022)
Average Vacancy at Sale: 11.5% (10.4% in Q2 2022)

Top I-88 West Industrial Real Estate Property Sales

1) Property: Aurora Distribution Center
*Rating: 5
Year Built: 2015
Building SF: 238,604
Vacancy: 
0%
Price (PSF): $359,202,000 ($1,505,000)
Cap Rate: Not Listed

2) Property: 2727 W Diehl Rd.
*Rating: 4
Year Built: 1997
Building SF: 525,848
Vacancy: 
0%
Price (PSF): $65,000,000 ($124)
Cap Rate: Not Listed

 

Top South I-55 Industrial Sales Statistics (Past 12 Months)

Sales Comparables: 73 (80 in Q1 2022)
Average Cap Rate:
 N/A
Average Price/ SF: 
$123 ($118 in Q1 2022)
Average Vacancy at Sale: 3.6% (3.5% in Q1 2022)

Top South I-55 Industrial Real Estate Property Sales

1) Property: Bldg 1 (775 Veterans Pky)
*Rating: 5
Year Built: 2020
Building SF: 573,752
Vacancy:
0%
Price (PSF): $89,194,044 ($155)
Cap Rate: Not Listed

2) Property: 920 Taylor Rd.
*Rating: 5
Year Built: 2012
Building SF: 308,955
Vacancy:
0%
Price (PSF): $73,500,000 ($238)
Cap Rate: Not Listed

 

Top O’Hare Industrial Sales Statistics (Past 12 Months)

Sales Comparables: 201 (213 in Q1 2022)
Average Cap Rate:
6.5% (7.0% in Q1 2022)
Average Price/ SF: 
$113 (111 in Q1 2022)
Average Vacancy at Sale: 3.1% (3.3% in Q1 2022)

Top O’Hare Industrial Real Estate Property Sales

1) Property: 401 W Touhy Ave
*Rating: 2
Year Built: –
Building SF: 134,050
Vacancy:
0%
Price (PSF): $50,100,000 ($374)
Cap Rate: Not Listed

2) Property: 1455 W Thorndale Ave
*Rating:
3
Year Built:
1992
Building SF:
251,909
Vacancy:
0%
Price (PSF): $36,000,000 ($143)
Cap Rate: 5.3%

3) Property: Elk Grove Technology (150 Innovation Dr.) 
*Rating:
4
Year Built:
2019
Building SF:
151,728
Vacancy:
0%
Price (PSF): 
$37,120,991 ($245)
Cap Rate: 
Not Listed

 

I-88 West Industrial Construction Projects Statistics

All-Time Annual Average Square Feet: 1,367, 212 (1,360,998 in Q2 2022)
Delivered SF (Past 8 Qs):
2,274,978 (2,013,278in Q2 2022)
Delivered SF (Next 8 Qs):
4,436,195 (3,472,619 in Q2 2022)
Proposed SF (Next 8 Qs): 2,781,658 (3,775,976in Q2 2022)

Top I-88 West Industrial Projects Delivered

1) Property: 14539 S Depot Rd.
Rating*:
4
Building SF:
264,500
Stories:
1
Completion:
Q2 2022
Developer/ Owner:
N/A

2)Property: Building A (925 Enterprise St.)
Rating*:
4
Building SF: 139,128
Stories:
1
Completion:
Q2 2022
Developer/ Owner:
Trammell Crow Company / Ferrara Candy Company

3)Property: Perlow Steel Lots 3 & 4(14636 S Depot Rd.)
Rating*:
 4
Building SF:
65,120
Stories:
1
Completion:
Q1 2022
Developer/ Owner:
Not Listed / Not Listed

4) Property: Building B (805 Enterprise St.)
Rating*:
3
Building SF: 74,620
Stories:
1
Completion: Q2 2022
Developer/ Owner:
Northern Builders Inc. / Village of Plainfield

Top I-88 West Industrial Projects Under Construction

1) Property: Facebook DeKalb Data Center (Gurler Rd)
Rating*:
5
Building SF:
907,000
Stories:
1
Completion:
Q1 2022
Developer/ Owner:
Trammell Crow Company / Ferrara Candy Company

 

South I-55 Industrial Construction Projects Statistics

All-Time Annual Average Square Feet: 2,767,968 (2,745,056 in Q1 2022)
Delivered SF (Past 8 Qs):
5,166,141 (3,569,914 in Q1 2022)
Delivered SF (Next 8 Qs):
2,640,835 (2,428,310 in Q1 2022)
Proposed SF (Next 8 Qs): 3,486,210 (3,384,324 in Q1 2022)

Top South I-55 Industrial Projects Delivered

1) Property: Romeoville Gateway (10000 Woodward Ave) 
Rating*:
4
Building SF:
370,973
Stories: 
2
Completion:
Q2 2022
Developer/ Owner:
Duke Realty Corporation

2) Property: Wayfair (1040 W Renwick)
Rating*:
5
Building SF:
1,200,420
Stories:
1
Completion:
Q2 2022
Developer/ Owner:
Duke Realty Corporation

Top South I-55 Industrial Projects Under Construction

1) Property: 555 S Pinnacle Dr.
Rating*:
5
Building SF:
1,267,000
Stories:
1
Completion:
Q4 2022
Developer/ Owner: 
Joilet Regional Port District

2) Property: 2501 Davey Rd
Rating*:
5
Building SF:
361,075
Stories:
1
Completion:
Q4 2022
Developer/ Owner:
Prologis, Inc

3) Property: Airport Logistics Center II (900 W Renwick Rd.)
Rating*:
5
Building SF:
347,760
Stories:
1
Completion:
Q4 2022
Developer/ Owner:
Duke Realty Corporation

 

O’Hare Industrial Construction Projects Statistics

All-Time Annual Average Square Feet: 691,212(682,304 in Q1 2022)
Delivered SF (Past 8 Qs):
2,699,340 (2,692,136 in Q1 2022)
Delivered SF (Next 8 Qs):
1,459,928 (1,207,950 in Q1 2022)
Proposed SF (Next 8 Qs): 2,066,580 (1,560,126 in Q1 2022)

Top O’Hare Industrial Projects Delivered

1) Property: Microsoft Data Center (6 King St.) 
Rating*:
4
Building SF:
400,000
Stories:
2
Completion:
Q1 2022
Developer/ Owner:
Brennan Investment Group / Brennan Investment Group

2) Property: Gullo International (1900 Busse Rd.)
Rating*:
4
Building SF:
42,027
Stories:
1
Completion:
Q3 2021
Developer/ Owner:
Gullo International Development

3) Property: Phase III (1000-1138 N Tower Ln)
Rating*:
4
Building SF:
144,350
Stories:
1
Completion:
Q3 2021
Developer/ Owner:
Hamilton Partners

Top O’Hare Industrial Projects Under Construction

1) Property: Building 1 (Busse Rd. & Devon Ave)
Rating*:
4
Building SF:
362,900
Stories:
1
Completion:
Q4 2022
Developer/ Owner:
Prologis, LP

Data Sources: Cawley Chicago & CoStar 

 

View the Latest Chicago Office Real Estate Report

Chicago Q3 2022 | Office Real Estate Report
The Terminal Selected as Finalist in NAIOP’s 35th Annual Awards for Excellence as Office Redevelopment of the Year

Recent Posts