Chicago Q1 2022 | Industrial Real Estate Report

Chicago Industrial Real Estate Market Report 2019

Chicago’s industrial market continues to see record levels of demand, as an astounding 39.3 million of direct net SF was positively absorbed over the past year. This level of demand formation is almost double the previous record high for Chicago of 24 million SF (set in 2004) and well over twice the average levels seen over the past five years. At the same time, leasing activity continued at a record clip in 2021, a signal that the strong pace of absorption shall continue into 2022.

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 in the manufacturing, retail, and logistics industries all signed for significant chunks of space over the past year, with these three industries combined accounting for over 75% of both leasing and absorption activity in Chicago over that time.

Cawley Chicago’s industrial real estate experts pull the top stats for leases, sales, and projects under construction in Chicago’s industrial real estate market every quarter in order to get a clear idea of where the market is and where it is going. Cawley also covers the I-88 West, South I-55, and O’Hare industrial real estate markets comparatively.

“The only negative impact that the historic low vacancy rates we’re seeing in Chicagoland has created is the challenge for companies to grow.  It’s become near impossible to find functional vacant warehouse space to fulfill tenant demands in a lot of the submarkets.  The benefit for Landlords is there’s some real rent growth occurring.”

Joshua Hearne, SIOR, Principal @ Cawley Chicago

Top Overall Chicago Industrial Real Estate Lease Statistics

12 Month Deliveries (Square Feet): 22.9 million (19.5 million in Q4 2021)
12 Month Net Absorption (Square Feet): 39.3 million (33.7 million in Q4 2021)
Vacancy Rate: 4.7% (5.2% in Q4 2021)
12 Month Rent Growth: 9.1% (7.8% in Q4 2021)

Top Chicago Industrial Leases (Past 12 Months)

1) Property: 11400 Venture Ct.
Submarket:
North Kane / I-90
Leased SF:
1,160,150
Quarter:
Q3 2021
Tenant: Amazon
Tenant Rep: N/A
Leasing Rep:
N/A

2)Property: 21015 W Walter Strawn Dr.
Submarket: 
North Kane/I-90
Leased SF:
1,132,617
Quarter:
Q2 2021
Tenant:
Cypress Medical Products
Tenant Rep:
N/A
Leasing Rep:
N/A

3) Property: 10421 38th St.
Submarket:
Kenosha East
Leased SF:
1,050,000
Quarter:
Q1 2022
Tenant:
Amazon
Tenant Rep: N/A
Leasing Rep: Lee & Associates

4)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

5) 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

Top Chicago Industrial Sales Statistics (Past 12 Months)

Sales Comparables: 1,656 (1,656 in Q4 2021)
Average Cap Rate:
7.7% (7.7% in Q4 2021)
Average Price/ SF: 
$83 ($79 in Q4 2021)
Average Vacancy at Sale: 11.9% (12.3% in Q4 2021)

Top Chicago Industrial Property Sales

1) Property: Butterfield 2865
*Rating:
5
Year Built: 
2017
Building SF:
954,720
Vacancy:
0%
Price (PSF): 
$116,601,000 ($112)
Cap Rate: 
Not Listed

2) Property: 2500 W Bradley Pl
*Rating:
3
Year Built: 
1956
Building SF:
355,400
Vacancy:
11.3%
Price (PSF): 
$97,250,000 ($274)
Cap Rate: 
Not Listed

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

4) Property: Core5 Logistics Center (1023 E Laraway Rd)
*Rating: 5
Year Built: 2017
Building SF: 1,026,000
Vacancy: 
0%
Price (PSF): $94,250,000 ($92)
Cap Rate: Not Listed

5) Property: Bldg 1 (775 Veterans Pky.)
*Rating: 5
Year Built: 2020
Building SF: 573,752
Vacancy: 
0%
Price (PSF): $89,194,044 ($52)
Cap Rate: Not Listed

*Rating is 1-5, 5 being the best

Chicago Industrial Construction Projects Statistics

Properties Currently Under Construction: 105 (102 in Q4 2021)
Total Size: 
31,483,495 (29,747,378 SF in Q4 2021) 
Percent of Inventory:
2.5% (2.4% in Q4 2021)
Preleased: 43.6% (46.8% in Q4 2021)

Top Chicago Industrial Projects Under Construction

1) Property: Wayfair (1040 W Renwick Rd)
Rating*:
5
Building SF:
1,200,420
Stories:
1
Completion:
Q3 2022
Developer/ Owner:
Duke Realty Corporation / Duke Realty Corporation

2) Property: Proctor & Gamble (Route 47)
Rating*:
3
Building SF:
1,200,000
Stories:
1
Completion:
Q3 2022
Developer/ Owner:
Not Listed / Not Listed

3) Property: Cherry Hill 20 (2250 Berens Ct.)
Rating*:
4
Building SF:
1,159,200
Stories:
1
Completion:
Q2 2022
Developer/ Owner:
Northern Builders, Inc. / USAA Real Estate

4) Property: Commerce 94 (10421 38th St.)
Rating*:
5
Building SF:
1,050,000
Stories:
1
Completion:
Q4 2022
Developer/ Owner:
CenterPoint Properties / CenterPoint Properties

5)Property: 4300 Brandon Rd.
Rating*:
5
Building SF:
1,035,034
Stories:
1
Completion:
Q1 2022
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): 1,900,000 (1,700,000 in Q4 2021)
12 Month Net Absorption (Square Feet): 2.4 million (2 million in Q4 2021)
Vacancy Rate: 8.7% (9.7% in Q4 2021)
12 Month Rent Growth: 8.6% (8.0% in Q4 2021)

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: 1998 Melissa Ln
Rating:
4
Deals:
1
Square Feet:
172,654
Vacancy:
23.9%
Net Absorption:
68,705

3) Property: Mitchell Corporate Center
Rating:
4
Deals:
1
Square Feet:
65,099
Vacancy:
4.7%
Net Absorption:
65,099

 

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

12 Month Deliveries (Square Feet): 1.4M (1.9M in Q4 2021)
12 Month Net Absorption (Square Feet): 6.2M (3.9M in Q4 2021)
Vacancy Rate: 3.9% (6.1% in Q4 2021)
12 Month Rent Growth: 8.6% (7.4% in Q4 2021)

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

1) Property: Building 2 (1150 W 115th St)
Rating:
5
Deals:
3
Square Feet:
636,590
Vacancy:
24.3%
Net Absorption:
414,487

2) Property: 599 S Schmidt Rd
Rating:
5
Deals:
3
Square Feet:
189,673
Vacancy:
47.4%
Net Absorption:
218,754

3) Property: Bolingbrook Distribution Center
Rating:
5
Deals:
2
Square Feet:
365,814
Vacancy:
69.5%
Net Absorption:
174,524

 

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

12 Month Deliveries (Square Feet): 459K (840K in Q4 2021)
12 Month Net Absorption (Square Feet): 4.4M (5.3M in Q4 2021)
Vacancy Rate: 2.7% (2.8% in Q4 2021)
12 Month Rent Growth: 8.5% (7.6% in Q4 2021)

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

1) Property: Data Center (1717 Busse Rd.)
Rating:
4
Deals:
1
Square Feet:
253,000
Vacancy:
0%
Net Absorption:
216,857

2)Property: Building 1 (1155 W Devon Ave.)
Rating:
4
Deals:
2
Square Feet:
94,453
Vacancy:
15.2%
Net Absorption:
190,375

3) Property: Building 2 (1055 W Devon Ave)
Rating:
5
Deals:
2
Square Feet:
166,327
Vacancy:
42.6%
Net Absorption:
166,327

 

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

Sales Comparables: 108 (104 in Q4 2021)
Average Cap Rate: 
6.1% (6.6% in Q4 2021)
Average Price/ SF: 
$95 ($98 in Q4 2021)
Average Vacancy at Sale: 8.8% (10.8% in Q4 2021)

Top I-88 West Industrial Real Estate Property Sales

1) Property: Butterfield 2865 (2865 Duke)
*Rating: 5
Year Built: 2017
Building SF: 954,720
Vacancy: 
0%
Price (PSF): $116,601,000 ($122)
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: 71 (54 in Q4 2021)
Average Cap Rate:
8.0% (8.0% in Q4 2021)
Average Price/ SF: 
$128 ($104 in Q4 2021)
Average Vacancy at Sale: 7.0% (6.0% in Q4 2021)

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: 214 (184 in Q4 2021)
Average Cap Rate:
8.0% (7.5% in Q4 2021)
Average Price/ SF: 
$112 ($98 in Q4 2021)
Average Vacancy at Sale: 5.8% (6.1% in Q4 2021)

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: 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

3) Property: 5Elk Grove Technology (801 Innovation Dr.)
*Rating: 4
Year Built: 2019
Building SF: 128,476
Vacancy:
0%
Price (PSF): $31,432,277 ($245)
Cap Rate: Not Listed

 

I-88 West Industrial Construction Projects Statistics

All-Time Annual Average Square Feet: 1,363,024 (1,366,788 in Q4 2021)
Delivered SF (Past 8 Qs):
2,110,334 (3,416,816 in Q4 2021)
Delivered SF (Next 8 Qs):
1,688,237 (1,367,931 in Q4 2021)
Proposed SF (Next 8 Qs): 3,883,581 (4,104,388 in Q4 2021)

Top I-88 West Industrial Projects Delivered

1) 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

2) Property: Building B (805 Enterprise St.)
Rating*:
3
Building SF:
74,620
Stories:
1
Completion:
Q1 2022
Developer/ Owner:
Not Listed / Not Listed

3) Property: Ferrara Candy (801 Gurier Rd)
Rating*:
5
Building SF:
1,660,000
Stories:
1
Completion:
Q3 2021
Developer/ Owner:
Trammell Crow Company / Ferrara Candy Company

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: 2,745,056 (2,755,956 in Q4 2021)
Delivered SF (Past 8 Qs):
3,569,914 (3,255,956 in Q4 2021)
Delivered SF (Next 8 Qs):
2,428,310 (2,347,100 in Q4 2021)
Proposed SF (Next 8 Qs): 3,384,324 (3,396,084 in Q4 2021)

Top South I-55 Industrial Projects Delivered

1) Property: Romeoville Gateway (1301 N Abbott Rd.)
Rating*:
4
Building SF:
351,870
Stories:
1
Completion:
Q1 2022
Developer/ Owner:
IDI Logistics / IDI Logistics

2) Property: 1300 N Joliet Rd
Rating*:
3
Building SF:
15,130
Stories:
1
Completion:
Q1 2022
Developer/ Owner:
Not Listed / Not Listed

Top South I-55 Industrial Projects Under Construction

1) Property: Wayfair (1040 W Renick Rd)
Rating*:
5
Building SF:
1,200,420
Stories:
1
Completion:
Q1 2022
Developer/ Owner:
Duke Realty Corporation

2) Property: 10000 Woodward Ave.
Rating*:
4
Building SF:
370,973
Stories:
2
Completion:
Q1 2022
Developer/ Owner:
Duke Realty Corporation

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

 

O’Hare Industrial Construction Projects Statistics

All-Time Annual Average Square Feet: 682,304 (688,140 in Q4 2021)
Delivered SF (Past 8 Qs):
2,692,136 (2,846,136 in Q4 2021)
Delivered SF (Next 8 Qs):
1,207,950 (832,600 in Q4 2021)
Proposed SF (Next 8 Qs): 1,560,126 (1,007,626 in Q4 2021)

Top O’Hare Industrial Projects Delivered

1) Property: Gullo International Development (1900 Busse Rd)
Rating*:
4
Building SF:
42,027
Stories:
1
Completion:
Q3 2021
Developer/ Owner:
Not Listed / Gullo International Development

2) Property: Phase III
Rating*:
4
Building SF:
144,350
Stories:
1
Completion:
Q3 2021
Developer/ Owner:
Hamilton Partners / Not Listed

3) Property: Nippon Express Headquarters
Rating*:
4
Building SF:
317,513
Stories:
1
Completion:
Q2 2021
Developer/ Owner:
Alston Construction Co. / Nippon Express

Top O’Hare Industrial Projects Under Construction

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

Data Sources: Cawley Chicago & CoStar 

 

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