Chicago Industrial Real Estate Report: Leases, Sales & Construction Projects

Chicago Industrial Real Estate Market Report 2019

Chicago is considered one of the top commercial real estate markets in the United States. Unemployment in The Windy City dropped almost 1% over the first quarter of 2019 alone to 4%. That is the best it has been since the crisis in 2009, where it rose above 13%. The manufacturing sector in Chicago gained over 8,000 jobs from 2018 to 2019. Job growth is one of the best indications for the health of a commercial real estate market, especially for industrial real estate.

It goes without saying that the current pandemic is going to change the landscape of the economy, but there is confidence in Chicago’s industrial real estate market moving forward.

Cawley Chicago’s industrial 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.

I believe the demand for industrial space will continue to grow and be in high demand. 

E-commerce which has been one of the primary driving factors for industrial real estate over the last 5-10 years will continue to surge. That industry has welcomed many new customers since the start of the pandemic and may have accelerated the e-commerce growth sector by at least 5 years.

I also believe that we will see some American manufacturing coming back as well. There may be many companies that no longer want to put their faith in foreign labor markets or in other countries that makes it more difficult to get their products quickly and easily.”

Andrew Maletich, Principal / Industrial Specialist @ Cawley Chicago

Chicago Industrial Real Estate Statistics Q1 2020

Top Overall Chicago Industrial Real Estate Lease Statistics

12 Month Deliveries (Square Feet): 22.2 million (19.7 million in Q4 2019)
12 Month Net Absorption (Square Feet): 13.8 million (17.4 million in Q4 2019)
Vacancy Rate: 6.3% (5.8% in Q4 2019)
12 Month Rent Growth: 4.3% (2.6% in Q4 2019)

Top Chicago Industrial Leases (Past 12 Months)

1) Property: 3401 Brandon Rd
Submarket:
Joliet Area
Leased SF:
1,639,000
Quarter:
Q2 2019
Tenant: Harbor Freight

2) Property: 3300 Channahon Rd
Submarket:
Joliet Area
Leased SF:
1,220,140
Quarter:
Q3 2019
Tenant: Target
Tenant Rep: CBRE
Leasing Rep:
NAI Hiffman

3) Property: I-55 / Amoco Rd
Submarket: 
Joliet Area
Leased SF:
1,100,000
Quarter:
Q3 2019
Tenant:
Amazon

4) Property: 3501 S Pulaski Rd
Submarket: South Chicago
Leased SF:
999,900
Quarter:
Q4 2019
Tenant:
Target
Tenant Rep: CBRE
Leasing Rep:
Cushman & Wakefield

5) Property: 3901 Brandon Rd
Submarket:
Joliet Area
Leased SF:
826,755
Quarter:
Q1 2019
Tenant:
UNIS

Top Chicago Industrial Sales Statistics (Past 12 Months)

Sales Comparables: 1,539 (1,432 in Q4 2019)
Average Cap Rate:
9.2% (8.8% in Q4 2019)
Average Price/ SF: 
$74 ($72 in Q4 2019)
Average Vacancy at Sale: 11.2% (12.8% in Q4 2019)

Top Chicago Industrial Property Sales

1) Property: FedEx Distribution Center (5959 W Howard St)
*Rating:
4
Year Built: 
2015
Building SF:
314,202
Vacancy:
0%
Price (PSF): 
$84,262,035 ($268)
Cap Rate: 
5.7%

2) Property: 930 W Evergreen Ave
*Rating:
4
Year Built: 
1998
Building SF:
280,500
Vacancy: 
67.9%
Price (PSF): 
$73,284,000 ($261)
Cap Rate: 
Not Listed

3) Property: 2400 Dralle Rd
*Rating: 5
Year Built: 2011
Building SF: 1,350,000
Vacancy: 
0%
Price (PSF): $73,150,000 ($54)
Cap Rate: Not Listed

4) Property: Building 1 (2357 S Wood St)
*Rating:
5
Year Built: 
2017
Building SF:
227,043
Vacancy: 
0%
Price (PSF): 
$68,683,000 ($303)
Cap Rate: 
Not Listed

5) Property: 1109 E Lake St
*Rating: 4
Year Built: 1998
Building SF: 336,000
Vacancy: 
0%
Price (PSF): $58,343,500 ($174)
Cap Rate: Not Listed

*Rating is 1-5, 5 being the best

Chicago Industrial Construction Projects Statistics

Properties Currently Under Construction: 71 (86 in Q4 2019)
Total Size: 
17,234,698 (18,226,070 SF in Q4 2019) 
Percent of Inventory:
1.4% (1.5% in Q4 2019)
Preleased: 38.8% (31.8% in Q4 2019)

Top Chicago Industrial Projects Under Construction

1) Property: Ferrara Candy (Gurler Rd)
Rating*:
5
Building SF:
1,600,000
Stories:
1
Completion:
Q2 2021
Developer/ Owner:
Trammell Crow Company / Ferrara Candy Company

2) Property: CenterPoint Intermodal (3501 Brandon Rd)
Rating*:
5
Building SF:
1,128,145
Stories:
1
Completion:
Q4 2020
Developer/ Owner:
CenterPoint Properties

3) Property: I-55 / Amoco Rd
Rating*:
5
Building SF:
1,100,000
Stories:
1
Completion:
Q4 2020
Developer/ Owner:
Venture One Real Estate

4) Property: Pullman Crossings (S Woodlawn Ave)
Rating*:
4
Building SF:
1,037,000
Stories:
1
Completion:
Q4 2020
Developer/ Owner:
Ryan Companies / U.S. Bank

5) Property: Exchange 55 (3501 S Pulaski Rd)
Rating*:
5
Building SF:
999,900
Stories:
1
Completion:
Q2 2020
Developer/ Owner:
Hilco Real Estate

*Rating is 1-5, 5 being the best

Chicago I88 Industrial Real Estate Statistics Q1 2020

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

12 Month Deliveries (Square Feet): 2.4 million (1.1 million in Q4 2019)
12 Month Net Absorption (Square Feet): 877K (-10.6K in Q4 2019)
Vacancy Rate: 7.8% (5.9% in Q3 2019)
12 Month Rent Growth: 4.3% (2.5% in Q4 2019)

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

1) Property: Butterfield East 550 (2850 Duke Pky)
Rating:
5
Deals:
1
Square Feet:
549,588
Vacancy:
39.9%
Net Absorption:
549,588

2) Property: 1998 Melissa Ln
Rating:
4
Deals:
2
Square Feet:
103,949
Vacancy:
67.6%
Net Absorption:
87,164

3) Property: Facility #2 (3565 Butterfield Rd)
Rating:
5
Deals:
1
Square Feet:
58,240
Vacancy:
6.5%
Net Absorption:
58,240

Chicago I55 Industrial Real Estate Statistics Q1 2020

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

12 Month Deliveries (Square Feet): 2.2M (2M in Q4 2019)
12 Month Net Absorption (Square Feet): 3.1M (3.1M in Q4 2019)
Vacancy Rate: 7.9% (8.6% in Q4 2019)
12 Month Rent Growth: 4.3% (2.7% in Q4 2019)

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

1) Property: Airport Logistics Center 1 (20100 Renwick Rd)
Rating:
5
Deals:
1
Square Feet:
543,780
Vacancy:
0%
Net Absorption:
543,780

2) Property: Airport Distribution Center
Rating:
4
Deals:
1
Square Feet:
676,026
Vacancy:
54.5%
Net Absorption:
384,768

3) Property: Romeoville Commerce Center (200 S Pinnacle Dr)
Rating:
4
Deals:
2
Square Feet:
204,489
Vacancy:
18.7%
Net Absorption:
132,522

Chicago O'Hare Industrial Real Estate Statistics Q1 2020

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

12 Month Deliveries (Square Feet): 1.1M
12 Month Net Absorption (Square Feet): -1.4M
Vacancy Rate: 7.0%
12 Month Rent Growth: 4.4%

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

1) Property: 2250 Lively Blvd
Rating:
4
Deals:
1
Square Feet:
85,990
Vacancy:
60%
Net Absorption:
85,990

2) Property: Elk Grove Technology Park (150 Innovation Dr)
Rating:
4
Deals:
1
Square Feet:
43,206
Vacancy:
78.6%
Net Absorption:
43,207

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

Sales Comparables: 100 (79 in Q4 2019)
Average Cap Rate: 
10.9% (10.5% in Q4 2019)
Average Price/ SF: 
$74 ($77 in Q4 2019)
Average Vacancy at Sale: 7.5% (11.6% in Q4 2019)

Top I-88 West Industrial Real Estate Property Sales

1) Property: White Oak Center (2380 Dielh Rd)
*Rating: 4
Year Built: 1996
Building SF: 304,482
Vacancy: 
0%
Price (PSF): $23,908,173 ($79)
Cap Rate: Not Listed

2) Property: Prairie Point III (2043 Corporate Ln)
*Rating: 4
Year Built: 1999
Building SF: 303,800
Vacancy: 
0%
Price (PSF): $23,854,622 ($79)
Cap Rate: Not Listed

3) Property: White Oak Center (2380 Dielh Rd)
*Rating: 4
Year Built: 1996
Building SF: 304,482
Vacancy: 
0%
Price (PSF): $23,473,132 ($77)
Cap Rate: Not Listed

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

Sales Comparables: 87 (69 in Q4 2019)
Average Cap Rate: 
10.1% (7.7% in Q4 2019)
Average Price/ SF: 
$95 ($100 in Q4 2019)
Average Vacancy at Sale: 12.8% (13.8% in Q4 2019)

Top South I-55 Industrial Real Estate Property Sales

1) Property: Pinnacle Distribution Center (1101 W Taylor Rd)
*Rating: 4
Year Built: 2003
Building SF: 541,123
Vacancy:
0%
Price (PSF): $43,675,843 ($81)
Cap Rate: Not Listed

2) Property: 1075 W Taylor Rd
*Rating:
4
Year Built: 
2004
Building SF:
443,620
Vacancy: 
41.5%
Price (PSF): $35,806,050 ($81)
Cap Rate: Not Listed

3) Property: Building 2 (600 Remington Blvd)
*Rating: 3
Year Built: 2016
Building SF: 320,703
Vacancy:
17.7%
Price (PSF): $35,776,428 ($112)
Cap Rate: Not Listed

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

Sales Comparables: 168
Average Cap Rate: 
8.5%
Average Price/ SF: 
$82
Average Vacancy at Sale: 12%

Top O’Hare Industrial Real Estate Property Sales

1) Property: Elk Grove Tech Park (200 Innovation Dr)
*Rating: 4
Year Built: 2019
Building SF: 165,128
Vacancy:
0%
Price (PSF): $29,000,000 ($176)
Cap Rate: Not Listed

2) Property: 201 Mittel Dr
*Rating:
3
Year Built: 
1987
Building SF:
261,000
Vacancy: 
0%
Price (PSF): $26,610,771 ($102)
Cap Rate: Not Listed

3) Property: 220 N York Rd
*Rating: 4
Year Built: 2019
Building SF: 190,226
Vacancy:
100%
Price (PSF): $24,920,000 ($131)
Cap Rate: Not Listed

 

I-88 West Industrial Construction Projects Statistics

All-Time Annual Average Square Feet: 1,375,404 (1,295,168 in Q4 2019)
Delivered SF (Past 4 Qs):
2,936,439 (1,443,703 in Q4 2019)
Delivered SF (Next 4 Qs):
1,600,000 (1,500,000 in Q4 2019)
Proposed SF (Next 4 Qs): 777,030 (1,313,244 in Q4 2019)

Top I-88 West Industrial Projects Delivered

1) Property: Prologis Aurora (701 Bilter Rd)
Rating*:
3
Building SF:
161,986
Stories:
1
Completion:
Q2 2020
Developer/ Owner:
Prologis, Inc.

2) Property: 25820 W 143rd St
Rating*:
3
Building SF:
1,500,000
Stories:
1
Completion:
Q1 2020
Developer/ Owner:
Seefried Properties, Inc.

Top I-88 West Industrial Projects Under Construction

1) Property: Ferrara Candy (Gurler Rd)
Rating*:
5
Building SF:
1,600,000
Stories:
1
Completion:
Q2 2021
Developer/ Owner:
Trammell Crow Company / Ferrara Candy Company

South I-55 Industrial Construction Projects Statistics

All-Time Annual Average Square Feet: 2,818,596 (2,835,764 in Q4 2019)
Delivered SF (Past 4 Qs):
3,362,154 (3,373,913 in Q4 2019)
Delivered SF (Next 4 Qs):
1,119,619 (1,410,247 in Q4 2019)
Proposed SF (Next 4 Qs): 4,723,859 (4,637,340 in Q4 2019)

Top South I-55 Industrial Projects Delivered

1) Property: 1035 S Frontage Rd
Rating*:
4
Building SF:
153,042
Stories:
1
Completion:
Q1 2020
Developer/ Owner:
Sterling Bay

2) Property: 599 S Schmidt Rd
Rating*:
5
Building SF:
218,754
Stories:
1
Completion:
Q1 2020
Developer/ Owner:
Bridge Development Partners / McShane Development Co.

Top South I-55 Industrial Projects Under Construction

1) Property: Bldg 1 (775 Veterans Pkw) 
Rating*:
5
Building SF:
573,752
Stories:
1
Completion:
Q3 2020
Developer/ Owner:
Crow Holdings Industrial / Trammell Crow Residential

2) Property: Bldg 2 (825 Veterans Pky)
Rating*:
5
Building SF:
256,375
Stories:
1
Completion:
Q2 2020
Developer/ Owner:
Crow Holdings Industrial / High Street Realty Company, LLC

O’Hare Industrial Construction Projects Statistics

All-Time Annual Average Square Feet: 636,272
Delivered SF (Past 4 Qs):
1,860,694
Delivered SF (Next 4 Qs):
1,565,739
Proposed SF (Next 4 Qs): 711,130

Top O’Hare Industrial Projects Delivered

1) Property: 500 Devon Ave
Rating*:
3
Building SF:
146,029
Stories:
1
Completion:
Q1 2020
Developer/ Owner:
CA Ventures, LLC / Lawerence Lacluyse

2) Property: 700 N Wood Dale Rd
Rating*:
3
Building SF:
100,378
Stories:
1
Completion:
Q1 2020
Developer/ Owner:
Bridge Development Partners

Top O’Hare Industrial Projects Under Construction

1) Property: Bldg 1 (1150 W Devon Ave) 
Rating*:
4
Building SF:
248,625
Stories:
1
Completion:
Q2 2020
Developer/ Owner:
Bridge Development Partners / Banner Oak Capital Partners, LP

2) Property: Bldg 2 (1050 W Devon Ave)
Rating*:
4
Building SF:
247,176
Stories:
1
Completion:
Q2 2020
Developer/ Owner:
Bridge Development Partners / Banner Oak Capital Partners, LP

Data Sources: Cawley Chicago & CoStar 

 

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