Chicago Industrial Real Estate Report Q4 2019: 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.

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 and South I-55 corridor industrial real estate markets comparatively.

Overall the logistics market in Chicago is poised for another positive year of growth and absorption. While there are some pockets of the market that have seen slower velocity the last year demand for industrial product on a Chicago-wide level continues.

As land gets harder and harder to develop late in the cycle vacancy rates should stay steady or even drop off in select submarkets. New construction, which increases supply, is the primary reason that rent growth hasn’t accelerated more quickly in Chicago.

At the current pace space is leasing up we will almost certainly see an increase in rents if developers pull back the reigns on new projects due to trepidation of being toward the end of the cycle.

David Conroy, Principal / Industrial Specialist @ Cawley Chicago

Chicago Industrial Real Estate Summary Q4 2019

Top Overall Chicago Industrial Real Estate Lease Statistics

12 Month Deliveries (Square Feet): 19.7 million (19.6 million in Q3 2019)
12 Month Net Absorption (Square Feet): 17.4 million (14.9 million in Q3 2019)
Vacancy Rate: 5.8% (6% in Q3 2019)
12 Month Rent Growth: 2.6% (3.1% in Q3 2019)

Top Chicago Industrial Leases (Past 12 Months)

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

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

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

4) Property: Taylor Rd & Southcreek Pky
Submarket:
South I-55 Corridor
Leased SF:
646,380
Quarter:
Q3 2019
Tenant: Crate & Barrel

5) Property: 120th Ave
Submarket: Kenosha East
Leased SF:
590,525
Quarter:
Q1 2019
Tenant:
Fresenius Kabi USA
Tenant Rep: CBRE
Leasing Rep:
Cushman & Wakefield

Top Chicago Industrial Sales Statistics (Past 12 Months)

Sales Comparables: 1,432 (1,317 in Q3 2019)
Average Cap Rate:
8.8% (8.5% in Q3 2019)
Average Price/ SF: 
$72 ($67 in Q3 2019)
Average Vacancy at Sale: 12.8% (14.4% in Q3 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: 86 (89 in Q3 2019)
Total Size: 
18,226,070 (20,133,521 SF in Q3 2019) 
Percent of Inventory:
1.5% (1.7% in Q3 2019)
Preleased: 31.8% (31.1% in Q3 2019)

Top Chicago Industrial Projects Under Construction

1) Property: Steiner Rd & 143rd St
Rating*:
3
Building SF:
1,500,000
Stories:
1
Completion:
Q1 2020
Developer/ Owner:
Seefried Properties Inc

2) Property: Exchange 55 (3501 S Pulaski Rd)
Rating*:
5
Building SF:
999,900
Stories:
1
Completion:
Q4 2020
Developer/ Owner:
Shapack Partners / Walton Street Capital LLC

3) Property: 94 Logistics Park II (3217 136th Ave)
Rating*:
4
Building SF:
932,400
Stories:
1
Completion:
Q3 2020
Developer/ Owner:
Logistics Property Company, LLC

4) Property: Orchard Gateway (I-88 & Orchard Rd)
Rating*:
3
Building SF:
764,895
Stories:
1
Completion:
Q3 2020
Developer/ Owner:
Panattoni Development Company

5) Property: Fresenius Kabi USA (120th Ave)
Rating*:
5
Building SF:
590,525
Stories:
1
Completion:
Q2 2020
Developer/ Owner:
Venture One Real Estate

*Rating is 1-5, 5 being the best

Chicago I-88 West Industrial Real Estate Summary Q4 2019

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

12 Month Deliveries (Square Feet): 1.1 million (428K in Q3 2019)
12 Month Net Absorption (Square Feet): -10.6K (-376K in Q3 2019)
Vacancy Rate: 5.9% (5.4% in Q3 2019)
12 Month Rent Growth: 2.5% (2.9% in Q3 2019)

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

1) Property: Jefferson Business Center (1748 W Jefferson Ave)
Rating:
4
Deals:
2
Square Feet:
68,932
Vacancy:
59.3%
Net Absorption:
40,110

2) Property: 1998 Melissa Ln
Rating:
4
Deals:
2
Square Feet:
103,949
Vacancy:
67.6%
Net Absorption:
0

3) Property: 2119 Fisher Drive
Rating:
4
Deals:
1
Square Feet:
104,957
Vacancy:
100%
Net Absorption:
0

Chicago South I-55 Industrial Real Estate Summary Q4 2019

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

12 Month Deliveries (Square Feet): 2M (2.4M in Q3 2019)
12 Month Net Absorption (Square Feet): 3.1M (3.7M in Q3 2019)
Vacancy Rate: 8.6% (8.5% in Q3 2019)
12 Month Rent Growth: 2.7% (3.2% in Q3 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: 145 Pinnacle Dr
Rating:
4
Deals:
1
Square Feet:
469,920
Vacancy:
0%
Net Absorption:
469,920

3) Property: Romeoville Commerce Center (200 S Pinnacle Dr)
Rating:
4
Deals:
1
Square Feet:
199,924
Vacancy:
0%
Net Absorption:
0

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

Sales Comparables: 79 (77 in Q3 2019)
Average Cap Rate: 
10.5% (9.6% in Q3 2019)
Average Price/ SF: 
$77 ($71 in Q3 2019)
Average Vacancy at Sale: 11.6% (8.2% in Q3 2019)

Top I-88 West Industrial Real Estate Property Sales

1) Property: Space Center Aurora II (2580 Prospect Ct)
*Rating: 4
Year Built: 1998
Building SF: 650,000
Vacancy: 
0%
Price (PSF): $39,596,000 ($61)
Cap Rate: Not Listed

2) 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

3) 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

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

Sales Comparables: 69 (54 in Q3 2019)
Average Cap Rate: 
7.7% (7.4% in Q3 2019)
Average Price/ SF: 
$100 ($92 in Q3 2019)
Average Vacancy at Sale: 13.8% (19.7% in Q3 2019)

Top South I-55 Industrial Real Estate Property Sales

1) 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

2) Property: Woodridge One (1000 Davey Rd)
*Rating: 5
Year Built: 2009
Building SF: 264,183
Vacancy:
0%
Price (PSF): $29,885,645 ($113)
Cap Rate: Not Listed

3) Property: Building III (700 Weber Rd)
*Rating:
5
Year Built: 
2015
Building SF:
602,820
Vacancy: 
0%
Price (PSF): $28,937,904 ($96)
Cap Rate: Not Listed

I-88 West Industrial Construction Projects Statistics

All-Time Annual Average Square Feet: 1,295,168 (157,276 in Q3 2019)
Delivered SF (Past 4 Qs):
1,443,703 (303,694 in Q3 2019)
Delivered SF (Next 4 Qs):
1,500,000 (2,337,908 in Q3 2019)
Proposed SF (Next 4 Qs): 1,313,244 (1,196,038 in Q3 2019)

Top I-88 West Industrial Projects Delivered

1) Property: Mitchell Corporate Center (945 Corporate Ln)
Rating*:
4
Building SF:
274,664
Stories:
1
Completion:
Q4 2019
Developer/ Owner:
Molto Properties

2) Property: Butterfield Center (2350 Frieder Ln)
Rating*:
4
Building SF:
503,244
Stories:
1
Completion:
Q4 2019
Developer/ Owner:
Sterling Bay / Theodore Novak

Top I-88 West Industrial Projects Under Construction

1) Property: Steiner Rd & 143rd St
Rating*:
3
Building SF:
1,500,000
Stories:
1
Completion:
Q1 2020
Developer/ Owner:
Seefried Properties Inc

South I-55 Industrial Construction Projects Statistics

All-Time Annual Average Square Feet: 2,835,764 (407,292 in Q3 2019)
Delivered SF (Past 4 Qs):
3,373,913 (2,036,727 in Q3 2019)
Delivered SF (Next 4 Qs):
1,410,247 (1,810,015 in Q3 2019)
Proposed SF (Next 4 Qs): 4,637,340 (3,591,150 in Q3 2019)

Top South I-55 Industrial Projects Delivered

1) Property: Interchange 55 Logistics (901-1001 W Bluff Rd))
Rating*:
5
Building SF:
684,320
Stories:
1
Completion:
Q3 2019
Developer/ Owner:
CT Realty Investors

2) Property: Airport Logistics Center 1 (20100 Renwick Rd)
Rating*:
5
Building SF:
543,780
Stories:
1
Completion:
Q3 2019
Developer/ Owner:
Duke Realty Corporation

Top South I-55 Industrial Projects Under Construction

1) Property: 775 Veterans Pkw
Rating*:
5
Building SF:
573,752
Stories:
1
Completion:
Q2 2020
Developer/ Owner:
Not Listed / Trammell Crow Residential

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

Data Sources: Cawley Chicago & CoStar 

 

View the Latest Chicago Office Real Estate Report

Cawley Chicago Arranges Warehouse Sale in Burr Ridge
Chicago Office Real Estate Report Q4 2019: Leases, Sales & Construction Projects

Recent Posts