Chicago Q3 2021 | 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 28.1 million SF of space absorbed over the past year. This level of demand formation is 25% higher than the previous record high for Chicago of 24 million SF (set in 2004) and more than 70% higher than the average levels seen over the past five years. At the same time, leasing activity has continued at a record clip in 2021, a signal that the strong pace of absorption will continue into the near future.

While demand for industrial space remains strong, new supply continues to deliver at a robust pace, with the market seeing approximately 19.6 million SF of new deliveries over the past year. At the same time, approximately 24.9 million SF of industrial space is underway in Chicago. Fortunately, over 60% of under-construction space is preleased, including eight of the nine largest projects underway in the area.

With demand growth steadily outpacing new supply, vacancy within Chicago’s industrial market has declined by -0.7% over the past 12 months to its lowest point in over two decades at 5.6%.

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 market is continuing to see a significant amount of demand in all facets of industrial real estate, from fortune 500 companies to local businesses.  This is evidenced by rents growing nearly 6%, vacancies several points below the historical market average and as much 15% year over year growth in sale prices of facilities.  Furthermore competition for user buildings has increased dramatically as available facilities and sites continue to dwindle.  With the current market conditions, developers nationwide continue to focus on Chicago and pursue challenging developments and redevelopments to help satisfy the significant dollars flowing into Industrial-based investments.”

Matt Garland, Vice President @ Cawley Chicago

Top Overall Chicago Industrial Real Estate Lease Statistics

12 Month Deliveries (Square Feet): 21.8 million (21 million in Q2 2021)
12 Month Net Absorption (Square Feet): 28.1 million (19.9 million in Q2 2021)
Vacancy Rate: 5.6% (6.2% in Q2 2021)
12 Month Rent Growth: 6.3% (4.2% in Q2 2021)

Top Chicago Industrial Leases (Past 12 Months)

1) Property: 3401 Brandon Rd
Submarket:
Joliet Area
Leased SF:
1,645,462
Quarter:
Q4 2020
Tenant: Harbor Freight
Tenant Rep: Cresa
Leasing Rep:
NAI Hiffman

2) Property: 2400 Dralle Rd
Submarket:
Far South Cook
Leased SF:
1,350,000
Quarter:
Q4 2020
Tenant: Clorox Company Distribution
Tenant Rep: Not Listed
Leasing Rep:
Not Listed

3) Property: 24231 S Exchange Blvd
Submarket: 
Joliet Area
Leased SF:
1,290,460
Quarter:
Q4 2020
Tenant:
Scotts Miracle-Gro
Tenant Rep: CBRE
Leasing Rep: Colliers International

4) Property: 1040 W Renwick Rd.
Submarket: South I-55 Corridor
Leased SF:
1,200,420
Quarter:
Q1 2021
Tenant:
Wayfair
Tenant Rep: Not Listed 
Leasing Rep:
Not Listed

5) Property: 3501 Brandon Rd
Submarket:
Joliet Area
Leased SF:
1,128,258
Quarter:
Q1 2021
Tenant:
Not Listed
Tenant Rep:
Not Listed 
Leasing Rep:
NAI Hiffman

Top Chicago Industrial Sales Statistics (Past 12 Months)

Sales Comparables: 1,516 (1,129 in Q2 2021)
Average Cap Rate:
8.3% (8.3% in Q2 2021)
Average Price/ SF: 
$78 ($78 in Q2 2021)
Average Vacancy at Sale: 11.1% (9.8% in Q2 2021)

Top Chicago Industrial Property Sales

1) Property: 29900 S Graaskamp 
*Rating: 5
Year Built: 2015
Building SF: 2,028,954
Vacancy: 
0%
Price (PSF): $126,500,000 ($62)
Cap Rate: Not Listed

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

3) Property: 930 W Evergreen Ave
*Rating:
4
Year Built: 
1998
Building SF:
339,000
Vacancy: 
0%
Price (PSF): 
$100,000,000 ($295)
Cap Rate: 
5.3%

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: 400 N Wolf Rd.
*Rating: 3
Year Built: 1957
Building SF: 914,949
Vacancy: 
0%
Price (PSF): $84,000,000 ($92)
Cap Rate: Not Listed

*Rating is 1-5, 5 being the best

Chicago Industrial Construction Projects Statistics

Properties Currently Under Construction: 86 (60 in Q2 2021)
Total Size: 
25,034,808 (20,409,346 SF in Q2 2021) 
Percent of Inventory:
2.0% (1.7% in Q2 2021)
Preleased: 43.2% (62.9% in Q2 2021)

Top Chicago Industrial Projects Under Construction

1) Property: Wayfair (1040 W Renwick Rd)
Rating*:
5
Building SF:
1,200,420
Stories:
1
Completion:
Q2 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:
Q2 2022
Developer/ Owner:
Not Listed / Not Listed

3) Property: 14002 104th St. 
Rating*:
4
Building SF:
1,048,461
Stories:
1
Completion:
Q1 2022
Developer/ Owner:
Not Listed / Not Listed

4) Property: 4300 Brandon Rd.
Rating*:
5
Building SF:
1,035,034
Stories:
1
Completion:
Q1 2022
Developer/ Owner:
CenterPoint Properties / CenterPoint Properties

5) Property: The Cubes at Country Club (I-57 & 183rd St.)
Rating*:
4
Building SF:
1,033,450
Stories:
1
Completion:
Q2 2022
Developer/ Owner:
CRG / Clayco

*Rating is 1-5, 5 being the best

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

12 Month Deliveries (Square Feet): 1,700,000 (179,000 in Q2 2021)
12 Month Net Absorption (Square Feet): -1.7 million (2.1 million in Q2 2021)
Vacancy Rate: 10.1% (5.0% in Q2 2021)
12 Month Rent Growth: 6.8% (4.1% in Q2 2021)

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

1) Property: CenterPoint 88 Industrial Center (900 Knell Rd.) 
Rating:
4
Deals:
1
Square Feet: 
231,742
Vacancy:
83.4%
Net Absorption:
296,455

2)Property: Mitchell Corporate Center (945 Corporate Dr) 
Rating:
4
Deals:
1
Square Feet:
65,099
Vacancy:
14.2%
Net Absorption:
213,161

3) Property: 540 Frontenac Rd
Rating:
4
Deals:
2
Square Feet:
207,580
Vacancy:
40.0%
Net Absorption:
131,040

 

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

12 Month Deliveries (Square Feet): 1.9M (2M in Q2 2021)
12 Month Net Absorption (Square Feet): 2.2M (738,000 in Q2 2021)
Vacancy Rate: 7.6% (9.1% in Q2 2021)
12 Month Rent Growth: 5.8% (4.8% in Q2 2021)

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

1) Property: 340 W Crossroads Pky
Rating:
4
Deals:
2
Square Feet:
299,520
Vacancy:
30.7%
Net Absorption:
299,520

2) Property: Corporate Crossings III 
Rating:
4
Deals:
1
Square Feet:
325,617
Vacancy:
40.0%
Net Absorption:
217,023

3) Property: Bldg 2 (825 Veterans Pky)
Rating:
5
Deals:
1
Square Feet:
148,019
Vacancy:
38.4%
Net Absorption:
182,437

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

12 Month Deliveries (Square Feet): 1M (2.5M in Q2 2021)
12 Month Net Absorption (Square Feet): 5.1M (1.9M in Q2 2021)
Vacancy Rate: 3.4% (6.6% in Q2 2021)
12 Month Rent Growth: 6.0% (4.1% in Q2 2021)

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

1) Property: Building 3 (1015 W Devon Ave)
Rating:
4
Deals:
1
Square Feet:
245,624
Vacancy:
20%
Net Absorption:
245,624

2) Property: Wood Dale DC (640 N Central Ave)
Rating:
4
Deals:
1
Square Feet:
159,170
Vacancy:
80%
Net Absorption:
159,170

2) Property: Building 1 (1155 W Devon Ave.)
Rating:
4
Deals:
3
Square Feet:
206,362
Vacancy:
59.4%
Net Absorption:
153,909

 

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

Sales Comparables: 94 (61 in Q2 2021)
Average Cap Rate: 
7.0% (7.2% in Q2 2021)
Average Price/ SF: 
$99 ($79 in Q2 2021)
Average Vacancy at Sale: 8.9% (14.9% in Q2 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 ($112)
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: 49 (36 in Q2 2021)
Average Cap Rate:
8.0% (6.6% in Q2 2021)
Average Price/ SF: 
$90 ($73 in Q2 2021)
Average Vacancy at Sale: 15.1% (28.5% in Q2 2021)

Top South I-55 Industrial Real Estate Property Sales

1) 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

1) Property: 333 Gibraltar Dr
*Rating: 4
Year Built: 1997
Building SF: 579,900
Vacancy:
0%
Price (PSF): $59,919,099 ($103)
Cap Rate: Not Listed

 

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

Sales Comparables: 149 (113 in Q2 2021)
Average Cap Rate: 
7.5% (7.6% in Q2 2021)
Average Price/ SF: 
$105 ($95 in Q2 2021)
Average Vacancy at Sale: 7.3% (8.1% in Q2 2021)

Top O’Hare Industrial Real Estate Property Sales

1) Property: 1925 Busse Rd
*Rating: 5
Year Built: 2013
Building SF: 208,406
Vacancy:
0%
Price (PSF): $36,600,000 ($176)
Cap Rate: Not Listed

2) Property: Building 1 (1333 S Mount Propsect Rd) 
*Rating:
4
Year Built:
2006
Building SF:
152,099
Vacancy:
0%
Price (PSF): $327,378,791 ($180)
Cap Rate: Not Listed

3) Property: 2001 S Mount Prospect Rd.
*Rating: 3
Year Built: 1971
Building SF: 166,956
Vacancy:
0%
Price (PSF): $26,250,503 ($157)
Cap Rate: Not Listed

 

I-88 West Industrial Construction Projects Statistics

All-Time Annual Average Square Feet: 1,377,424 (1,260,080 in Q2 2021)
Delivered SF (Past 8 Qs):
4,194,724 (2,640,966 in Q2 2021)
Delivered SF (Next 8 Qs):
1,315,681 (2,567,000 in Q2 2021)
Proposed SF (Next 8 Qs): 4,030,308 (1,690,760 in Q2 2021)

Top I-88 West Industrial Projects Delivered

1) 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

2) Property: Melissa Ln & Sullivan Rd
Rating*:
3
Building SF:
20,230
Stories:
1
Completion:
Q3 2021
Developer/ Owner:
Not Listed / Not Listed

3) Property: 2212 Ferry Rd.
Rating*:
3
Building SF:
1,610
Stories:
1
Completion:
Q2 2021
Developer/ Owner:
Not Listed / Not Listed

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: 2,777,688 (2,739,796 in Q2 2021)
Delivered SF (Past 8 Qs):
3,256,090 (4,266,452 in Q2 2021)
Delivered SF (Next 8 Qs):
1,961,191 (1,825,277 in Q2 2021)
Proposed SF (Next 8 Qs): 3,737,045 (4,203,667 in Q2 2021)

Top South I-55 Industrial Projects Delivered

1) Property: Carlow XVII (925 Dalton Ln.)
Rating*:
4
Building SF:
402,051
Stories:
1
Completion:
Q3 2021
Developer/ Owner:
Northern Builders Inc. / Northern Builders Inc.

2) Property: Carlow XVII (905 Dalton Ln.)
Rating*:
4
Building SF:
223,804
Stories:
1
Completion:
Q2 2021
Developer/ Owner:
Northern Builders Inc. / Northern Builders Inc.

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: Romeoville Gateway (1301 N Abbott Rd.)
Rating*:
4
Building SF:
351,870
Stories:
1
Completion:
Q4 2021
Developer/ Owner:
IDI Logistics

 

O’Hare Industrial Construction Projects Statistics

All-Time Annual Average Square Feet: 700,492 (48,172 in Q2 2021)
Delivered SF (Past 8 Qs):
3,120,641 (165,128 in Q2 2021)
Delivered SF (Next 8 Qs):
535,000 (0 in Q2 2021)
Proposed SF (Next 8 Qs): 1,305,226 (0 in Q2 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: Phase III (838 Patton Dr) 
Rating*:
4
Building SF:
135,000
Stories:
1
Completion:
Q3 2021
Developer/ Owner:
Not Listed / Realterm US, Inc.

Data Sources: Cawley Chicago & CoStar 

 

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