Chicago’s industrial market is still strong, with an astounding 33.8 million of direct net SF positively absorbed into it over the past 12 months. This level of demand formation is approximately 40% greater than the high set for Chicago in 2006 (24 million SF) and three times the average levels seen for the metro’s all-time average. Leasing activity metro-wide took a sizeable dip each quarter since 22Q2 and this trend is continuing into 2023. Meanwhile, however, construction activity is abating and vacancy is still compressed at record lows. Yet new supply is still maintaining a robust construction schedule to keep pace with the leasing activity from the prior year.
Approximately 22.1 million SF of new space materialized over the past year, with another 38.4 million SF of industrial space currently under construction in Chicago. Over 70% of current under-construction space is developed on speculation. Cranes are the most active in the Joliet, I-88 West, North Kane/I-90, and South I-55 Corridor Submarkets. Currently, demand is still outpacing new supply, with vacancy within Chicago’s industrial market declining by -0.9% over the past 12 months to post one of the lowest vacancy rates in over two decades at 3.9%.
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.
Buoyed by record levels of new demand and tight fundamentals, average industrial market rents are still rapidly rising in Chicago. Although industrial rents increased by an impressive 8.7% over the past year, Chicago lags behind the national average rental increase of 10.7%. The logistics and specialized segments saw the strongest rent growth in Chicago over the past year at 10.4% and 6.2%, respectively, while the flex segment reported gains of 3.9% over the same time.
“The end of 2022 didn’t let up for Chicago’s industrial real estate market. While there was a measurable pullback in demand from the investor community, users were extremely active in the market. The rise in interest rates didn’t seem to be enough to dampen demand from owner-users who have been in the market looking to purchase a building for the last 2 years. With limited new construction starting in the second half of 2022, historically low vacancy rates and low inventory of industrial properties for sale will continue to impact our industry throughout 2023. All this being said, certain industry sectors and businesses will undoubtedly be affected by the headwinds of inflation and rising interest rates. These factors will force businesses to evaluate their financing options, labor, and real estate.” – Frank Melchert, SIOR, Principal.
Top Overall Chicago Industrial Real Estate Lease Statistics
12 Month Deliveries (Square Feet): 28.2 million (28.1 million in Q3 2022)
12 Month Net Absorption (Square Feet): 33.8 million (36.3 million in Q3 2022)
Vacancy Rate: 3.9% (4.1% in Q3 2022)
12 Month Rent Growth: 8.7% (8.0% in Q3 2022)
Top Chicago Industrial Leases (Past 12 Months)
1)Property: SWC Millsdale & Route 53
Submarket: Joliet Area
Leased SF: 1,218,120
Quarter: Q1 2023
Tenant: N/A
Tenant Rep: N/A
Leasing Rep: CBRE
2) Property: 30350 S Graaskamp Blvd
Submarket:Joliet Area
Leased SF: 11,019,200
Quarter: Q4 2022
Tenant: PrimeSource
Tenant Rep: N/A
Leasing Rep: CBRE
3) 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
4) Property:901 Carlow Dr
Submarket:South I-55 Corridor
Leased SF:997,802
Quarter: Q1 2022
Tenant:NFI
Tenant Rep: N/A
Leasing Rep: JLL
5) 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
Top Chicago Industrial Sales Statistics (Past 12 Months)
Sales Comparables: 1,503 (1,782 in Q3 2022)
Average Cap Rate: 7.7% (7.5% in Q3 2022)
Average Price/ SF: $84 ($83 in Q3 2022)
Average Vacancy at Sale: 5.6% (10% in Q3 2022)
Top Chicago Industrial Property Sales
1) Property: Wayfair
*Rating: 5
Year Built: 2022
Building SF: 1,200,420
Vacancy: 0%
Price (PSF): $127, 336, 050 ($106)
Cap Rate: 3.7%
2) 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%
3) Property: 23700 W Bluff Rd.
*Rating: 5
Year Built: 2017
Building SF: 753,000
Vacancy: 0%
Price (PSF): $102,500,000 ($136)
Cap Rate: 3.5%
4)) Property: 25101 S Ridgeland Ave
*Rating: 5
Year Built: 2019
Building SF: 879,040
Vacancy: 0%
Price (PSF): $85,924,058 ($98)
Cap Rate: Not Listed
5) 801 Midpoint Rd
*Rating: 5
Year Built: 2008
Building SF: 965,183
Vacancy: 0%
Price (PSF): $75,077,411 ($78)
Cap Rate: Not Listed
*Rating is 1-5, 5 being the best
Chicago Industrial Construction Projects Statistics
Properties Currently Under Construction: 108
Total Size: 39.5M SF (37.5M SF in Q3 2022)
Percent of Inventory: 3.1% (2.9% in Q3 2022)
Preleased: 29.3% (25.5% in Q3 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: Minooka Distribution Center (11075 McLinden Rd)
Rating*: 5
Building SF:1,500,800
Stories: 1
Completion: Q4 2023
Developer/ Owner: Molto Properties / Walmart Inc.
3)Property: Third Coast Intermodal Hub (SWC Millsdale & Route 53)
Rating*: 5
Building SF: 1,281,120
Stories: 1
Completion: Q2 2023
Developer/ Owner: NorthPoint Development / N/A
4) Property: 1237 W Division St.
Rating*: 4
Building SF:1,184,800
Stories: 5
Completion: Q3 2024
Developer/ Owner: N/A / Logistics Property Company, LLC
5) Property: Third Coast Intermodal Hub (SWC Millsdale & Route 53)
Rating*: 5
Building SF: 1,056,353
Stories: 1
Completion: Q2 2023
Developer/ Owner: NorthPoint Development / N/A
*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 (561K in Q3 2022)
12 Month Net Absorption (Square Feet): 1.7 million (1.1 million in Q3 2022)
Vacancy Rate: 3.6% (5.3% in Q3 2022)
12 Month Rent Growth: 8.3% (6.8% in Q3 2022)
4 & 5 Star Industrial Properties Leasing Activity in I-88 West Corridor (Past 12 Months)
1) Property: Butterfield Center
Rating: 5
Deals: 1
Square Feet: 167,860
Vacancy: 13.3%
Net Absorption: 167,860
2) Property: Building A (925 Enterprise St.)
Rating: 4
Deals: 2
Square Feet: 98,237
Vacancy: 76.7%
Net Absorption: 43,254
3) Property: Meridian Business 880 (990 N Enterprise St.)
Rating: 4
Deals: 1
Square Feet: 34,000
Vacancy: 3.6%
Net Absorption: 34,000
Top South I-55 Corridor Industrial Lease Statistics (Past 12 Months)
12 Month Deliveries (Square Feet): 2.3M (2.4M in Q3 2022)
12 Month Net Absorption (Square Feet): 6.4M (7.5M in Q3 2022)
Vacancy Rate: 2.5% (1.4% in Q3 2022)
12 Month Rent Growth: 9.6% (8.1% in Q3 2022)
4 & 5 Star Industrial Properties Leasing Activity in South I-55 Corridor (Past 12 Months)
1) Property: 1001 W Bluff Rd
Rating: 5
Deals: 1
Square Feet:657,540
Vacancy: 20%
Net Absorption:657,540
2) Property: 1501 Remington Blvd.
Rating: 5
Deals: 2
Square Feet: 557,104
Vacancy: 30.5%
Net Absorption: 365,814
3) Property: 1251 W 115th St.
Rating: 5
Deals: 1
Square Feet:337,630
Vacancy: 20%
Net Absorption: 337,630
Top O’Hare Industrial Lease Statistics (Past 12 Months)
12 Month Deliveries (Square Feet): 1.1M (537K in Q3 2022)
12 Month Net Absorption (Square Feet): 663K (1.2M in Q3 2022)
Vacancy Rate: 3.2% (2.5% in Q3 2022)
12 Month Rent Growth: 9.0% (7.5% in Q3 2022)
4 & 5 Star Industrial Properties Leasing Activity in South O’Hare (Past 12 Months)
1) Property: 851-853 Expressway Dr.
Rating: 4
Deals: 1
Square Feet: 119,541
Vacancy:80%
Net Absorption: 119,541
2) Property: 701 E Innovation Dr.
Rating: 4
Deals: 1
Square Feet: 60,777
Vacancy: 0%
Net Absorption:47,946
3) Property: 1601 Estes Ave.
Rating: 4
Deals: 2
Square Feet:87,836
Vacancy: 0%
Net Absorption: 0
Top I-88 West Industrial Sales Statistics (Past 12 Months)
Sales Comparables: 96 (106 in Q3 2022)
Average Cap Rate: 8.5% (7.0% in Q3 2022)
Average Price/ SF: $76 ($165 in Q3 2022)
Average Vacancy at Sale: 7.9% (11.5% in Q3 2022)
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): $71,310,382 ($75)
Cap Rate: Not Listed
2) Property: Crate & Barrel (1860 W Jefferson Ave.)
*Rating: 4
Year Built: 1989
Building SF: 827,268
Vacancy: 0%
Price (PSF): $61,790,679 ($75)
Cap Rate: Not Listed
Top South I-55 Industrial Sales Statistics (Past 12 Months)
Sales Comparables: 61 (73 in Q3 2022)
Average Cap Rate: N/A
Average Price/ SF: $102 ($123 in Q3 2022)
Average Vacancy at Sale: 5.5% (3.6% in Q3 2022)
Top South I-55 Industrial Real Estate Property Sales
1) Property: Wayfair (1040 W Renwick Rd)
*Rating: 5
Year Built: 2022
Building SF:1,200,420
Vacancy: 0%
Price (PSF): $131,906,585 ($110)
Cap Rate: Not Listed
2) Property: Building III (700 S Weber Rd)
*Rating: 5
Year Built: 2015
Building SF: 602,820
Vacancy: 0%
Price (PSF): $64,432,914 ($107)
Cap Rate: Not Listed
Top O’Hare Industrial Sales Statistics (Past 12 Months)
Sales Comparables: 154 (201 in Q3 2022)
Average Cap Rate: 6.7% (6.5% in Q3 2022)
Average Price/ SF: $113 ($113 in Q3 2022)
Average Vacancy at Sale: 2.3% (3.1% in Q3 2022)
Top O’Hare Industrial Real Estate Property Sales
1) 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%
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: 701 E Innovation Dr
*Rating: 4
Year Built: 2019
Building SF: 122,404
Vacancy: 0%
Price (PSF): $31,912,007 ($261)
Cap Rate: Not Listed
I-88 West Industrial Construction Projects Statistics
All-Time Annual Average Square Feet: 1,341,816 (1,367, 212 in Q3 2022)
Delivered SF (Past 8 Qs): 2,204,978 (2,274,978 in Q3 2022)
Delivered SF (Next 8 Qs): 4,436,195 (4,436,195 in Q3 2022)
Proposed SF (Next 8 Qs): 2,999,658 (2,781,658 in Q3 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: 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
3)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
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: 2,739,880 (2,767,968 in Q3 2022)
Delivered SF (Past 8 Qs): 4,214,458 (5,166,141 in Q3 2022)
Delivered SF (Next 8 Qs): 3,488,597 (2,640,835 in Q3 2022)
Proposed SF (Next 8 Qs): 2,660,350 (3,486,210 in Q3 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: 696,236 (691,212 in Q3 2022)
Delivered SF (Past 8 Qs): 2,200,335 (2,699,340 in Q3 2022)
Delivered SF (Next 8 Qs): 1,024,899 (1,459,928 in Q3 2022)
Proposed SF (Next 8 Qs): 2,725,443 (2,066,580 in Q3 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