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.

Absorption in the industrial market this year has been dominated by Amazon as people shift to a higher percentage of purchases through e-commerce websites. If this were to continue as the trend it would be a little concerning to have the market dominated by one group that may pull pack their break-neck expansion at some point.

The good news is we’ve seen a lot of local business in various industries with footprints of 30,000-50,000 SF come back into the market. They’ve been sitting on their hands since March and have reached an impetus where there is pent up demand to do something in the way of expansions.

I think the continued growth of Amazon along with local businesses getting back in the mix and Fortune 500 companies looking to insulate their supply chains from global disruptions really point to a strong 2021 and I think even stronger 2022 as some of these supply chain re-organizations start to reach the execution stage.”

David Conroy, Principal / Industrial Specialist @ Cawley Chicago

 

Demand for industrial product in the city has remained consistent since the initial quarantine.

We are seeing continued strong interest from investors looking to plant their flag or expand their infill and last-mile footprints. With the shifts property values and increase in industrial local business’ production, we are very busy.

We are seeing high demand from both tenants and purchasers alike.

Frank Melchert, Principal / Industrial Specialist @ Cawley Chicago

Chicago O'Hare Industrial Real Estate Lease Statistics Q3 2020 - Cawley Chicago

Top Overall Chicago Industrial Real Estate Lease Statistics

12 Month Deliveries (Square Feet): 21.2 million (21.4 million in Q2 2020)
12 Month Net Absorption (Square Feet): 13.1 million (14.5 million in Q2 2020)
Vacancy Rate: 6.4% (6.3% in Q2 2020)
12 Month Rent Growth: 3.9% (3.6% in Q2 2020)

Top Chicago Industrial Leases (Past 12 Months)

1) Property: 1023 E Laraway Rd
Submarket:
Joliet Area
Leased SF:
1,026,000
Quarter:
Q3 2020
Tenant: General Motors
Tenant Rep: Not Listed
Leasing Rep:
JLL

2) Property: 23257 S Central Ave
Submarket: 
Far South Cook 
Leased SF:
1,015,000
Quarter:
Q1 2020
Tenant:
Amazon

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

4) Property: 30260 S Graaskamp Blvd
Submarket:
Joliet Area
Leased SF:
810,900
Quarter:
Q2 2020
Tenant:
Amazon
Tenant Rep:
Not Listed 
Leasing Rep:
CBRE

5) Property: 1101 W Airport Rd
Submarket:
South I-55 Corridor
Leased SF:
787,499
Quarter:
Q1 2020
Tenant:
Pactiv
Tenant Rep:
Cushman & Wakefield
Leasing Rep:
Colliers International

 

Top Chicago Industrial Sales Statistics (Past 12 Months)

Sales Comparables: 1,334 (1,481 in Q2 2020)
Average Cap Rate:
8.8% (8.8% in Q2 2020)
Average Price/ SF: 
$71 ($72 in Q2 2020)
Average Vacancy at Sale: 10.1% (9.7% in Q2 2020)

Top Chicago Industrial Property Sales

1) Property: Amazon Fulfillment Center (3501 120th Pl)
*Rating:
5
Year Built: 
2015
Building SF:
1,015,740
Vacancy:
0%
Price (PSF): 
$119,200,000 ($117)
Cap Rate: 
Not Listed

2) 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

3) Property: 325 S Route 31
*Rating:
3
Year Built: 
1956
Building SF:
4,000,000
Vacancy: 
0%
Price (PSF): 
$68,579,000 ($17)
Cap Rate: 
Not Listed

4) Property: 11211 Burlington Rd
*Rating: 5
Year Built: 2014
Building SF: 513,976
Vacancy: 
0%
Price (PSF): $56,800,000 ($111)
Cap Rate: Not Listed

5) Property: 2635 S Western Ave
*Rating: 4
Year Built: 1968
Building SF: 308,000
Vacancy: 
0%
Price (PSF): $54,500,000 ($177)
Cap Rate: Not Listed

*Rating is 1-5, 5 being the best

 

Chicago Industrial Construction Projects Statistics

Properties Currently Under Construction: 58 (66 in Q2 2020)
Total Size: 
22,265,208 (18,036,120 SF in Q2 2020) 
Percent of Inventory:
1.8% (1.5% in Q2 2020)
Preleased: 57% (53.7% in Q2 2020)

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: Harbor Freight (3401 Brandon Rd)
Rating*:
5
Building SF:
1,639,000
Stories:
1
Completion:
Q4 2020
Developer/ Owner:
CenterPoint Properties

3) Property: Medline Industries (20444 W Peterson Rd)
Rating*:
5
Building SF:
1,400,000
Stories:
1
Completion:
Q1 2021
Developer/ Owner:
The Alter Group / Medline Industries

4) Property: Building B BTS (24101 S Bradley Rd)
Rating*:
4
Building SF:
1,360,520
Stories:
1
Completion:
Q4 2020
Developer/ Owner:
Venture One Real Estate / USAA Real Estate

5) Property: CenterPoint Intermodal (3501 Brandon Rd)
Rating*:
5
Building SF:
1,282,145
Stories:
1
Completion:
Q4 2020
Developer/ Owner:
CenterPoint Properties

*Rating is 1-5, 5 being the best

 

Chicago Industrial I-88 Real Estate Lease Statistics Q3 2020 - Cawley Chicago

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

12 Month Deliveries (Square Feet): 2.4 million (2.4 million in Q2 2020)
12 Month Net Absorption (Square Feet): 2.8 million (1.4 million in Q2 2020)
Vacancy Rate: 6.2% (7.3% in Q2 2020)
12 Month Rent Growth: 3.9% (3.7% in Q1 2020)

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

1) Property: Butterfield Center (2350 Frieder Ln) 
Rating:
4
Deals:
1
Square Feet: 
335,384
Vacancy:
73.3%
Net Absorption:
335,384

2) Property: Jefferson Business Center (1748 W Jefferson Ave)
Rating:
4
Deals:
1
Square Feet:
30,240
Vacancy:
16.6%
Net Absorption:
100,383

3) Property: 898 Meridian Lake Dr
Rating:
4
Deals:
1
Square Feet:
184,851
Vacancy:
100%
Net Absorption:
184,851

 

Chicago Industrial I-55 Real Estate Lease Statistics Q3 2020 - Cawley Chicago

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

12 Month Deliveries (Square Feet): 2M (1.4M in Q2 2020)
12 Month Net Absorption (Square Feet): 300K (996K in Q2 2020)
Vacancy Rate: 8.9% (8.3% in Q2 2020)
12 Month Rent Growth: 3.9% (3.3% in Q2 2020)

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

1) Property: 1101 W Airport Rd 
Rating:
5
Deals:
1
Square Feet:
787,499
Vacancy:
60%
Net Absorption:
787,499

2) Property: Airport Distribution Center (179 S South Creek Pky)
Rating:
4
Deals:
1
Square Feet:
145,629
Vacancy:
30.2%
Net Absorption: 145,629

3) Property: Romeoville Commerce Center (208 S Pinnacle Dr)
Rating:
4
Deals:
1
Square Feet:
138,235
Vacancy:
41.5%
Net Absorption:
138,235

 

Chicago O'Hare Industrial Real Estate Lease Statistics Q3 2020 - Cawley Chicago

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

12 Month Deliveries (Square Feet): 1.8M (1.2M in Q2 2020)
12 Month Net Absorption (Square Feet): -1.7M (-2.1M in Q2 2020)
Vacancy Rate: 7.6% (7.4% in Q2 2020)
12 Month Rent Growth: 3.9% (3.5% in Q2 2020)

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

1) Property: Elk Grove Technology Park (150 Innovation Dr)
Rating:
4
Deals:
1
Square Feet:
44,198
Vacancy:
59.9%
Net Absorption:
76,842

2) Property: Elk Grove Technology Park (150 Innovation Dr)
Rating:
4
Deals:
1
Square Feet:
46,800
Vacancy:
85.4%
Net Absorption:
46,800

2) Property: Prologis (350 N York Rd)
Rating:
4
Deals:
1
Square Feet:
41,186
Vacancy:
25.8%
Net Absorption:
41,186

 

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

Sales Comparables: 69 (92 in Q2 2020)
Average Cap Rate: 
11.1% (10.4% in Q2 2020)
Average Price/ SF: 
$40 ($42 in Q2 2020)
Average Vacancy at Sale: 5.2% (4.8% in Q2 2020)

Top I-88 West Industrial Real Estate Property Sales

1) Property: 325 S Route 31 (2380 Dielh Rd)
*Rating: 3
Year Built: 1956
Building SF: 4,000,000
Vacancy: 
0%
Price (PSF): $68,579,000 ($17)
Cap Rate: Not Listed

2) Property: Aurora Distribution Center (2300 White Oak Circle)
*Rating: 5
Year Built: 1997
Building SF: 307,813
Vacancy: 
0%
Price (PSF): $23,252,565 ($76)
Cap Rate: Not Listed

 

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

Sales Comparables: 62 (81 in Q2 2020)
Average Cap Rate: 
11.5% (10.1% in Q2 2020)
Average Price/ SF: 
$84 ($99 in Q2 2020)
Average Vacancy at Sale: 17.5% (13.8% in Q2 2020)

Top South I-55 Industrial Real Estate Property Sales

1) Property: Prologis Romeoville (901 W Bluff Rd)
*Rating: 5
Year Built: 2019
Building SF: 684,320
Vacancy:
41.5%
Price (PSF): $50,272,343 ($73)
Cap Rate: Not Listed

1) Property: Prologis Romeoville (1001 W Bluff Rd)
*Rating: 5
Year Built: 2019
Building SF: 657,540
Vacancy:
100%
Price (PSF): $47,728,267 ($73)
Cap Rate: Not Listed

 

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

Sales Comparables: 160 (167 in Q2 2020)
Average Cap Rate: 
8.0% (8.3% in Q2 2020)
Average Price/ SF: 
$84 ($85 in Q2 2020)
Average Vacancy at Sale: 12.9% (11.3% in Q2 2020)

Top O’Hare Industrial Real Estate Property Sales

1) Property: 201 Mittel Dr
*Rating:
3
Year Built: 
1987
Building SF:
261,411
Vacancy: 
0%
Price (PSF): $29,400,000 ($112)
Cap Rate: Not Listed

2) 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

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: 1,351,820 (1,364,832 in Q2 2020)
Delivered SF (Past 4 Qs):
2,928,471 (2,805,399 in Q2 2020)
Delivered SF (Next 4 Qs):
1,660,000 (1,680,000 in Q2 2020)
Proposed SF (Next 4 Qs): 2,833,141 (1,684,030 in Q2 2020)

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: Diageo (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: 2,837,784 (2,788,540 in Q2 2020)
Delivered SF (Past 4 Qs):
4,526,102 (3,223,919 in Q2 2020)
Delivered SF (Next 4 Qs):
635,857 (1,119,619 in Q2 2020)
Proposed SF (Next 4 Qs): 3,763,710 (4,734,859 in Q2 2020)

Top South I-55 Industrial Projects Delivered

1) Property: Pinnacle Business Center (564 W Taylor Rd)
Rating*:
5
Building SF:
450,000
Stories:
1
Completion:
Q4 2020
Developer/ Owner:
Pizzuti Companies

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

Top South I-55 Industrial Projects Under Construction

1) Property: Carlow XVII (Rodeo Dr) 
Rating*:
4
Building SF:
402,051
Stories:
1
Completion:
Q2 2021
Developer/ Owner:
Northern Builders, Inc

2) Property: Carlow XVII (Rodeo Dr) 
Rating*:
4
Building SF:
222,806
Stories:
1
Completion:
Q2 2021
Developer/ Owner:
Northern Builders, Inc

 

O’Hare Industrial Construction Projects Statistics

All-Time Annual Average Square Feet: 677,224 (646,104 in Q2 2020)
Delivered SF (Past 4 Qs):
3,084,804 (2,255,561 in Q2 2020)
Delivered SF (Next 4 Qs):
832,123 (1,113,151 in Q2 2020)
Proposed SF (Next 4 Qs): 554,748 (791,215 in Q2 2020)

Top O’Hare Industrial Projects Delivered

1) Property: Wood Dale DC (640 N Central Ave)
Rating*:
4
Building SF:
159,170
Stories:
1
Completion:
Q3 2020
Developer/ Owner:
Black Creek Group

2) Property: Building 2 (1055 W Devon Ave)
Rating*:
4
Building SF:
247,176
Stories:
1
Completion:
Q3 2020
Developer/ Owner:
Bridge Development Partners

Top O’Hare Industrial Projects Under Construction

1) Property: Nippon Express Headquarters (800 N IL Route 83) 
Rating*:
4
Building SF:
317,600
Stories:
1
Completion:
Q1 2021
Developer/ Owner:
Alston Construction Co

Data Sources: Cawley Chicago & CoStar 

 

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