O’Hare’s industrial market is taking off

High demand has led to low vacancy rates, high rents

Chicago /
May.May 08, 2018 09:00 AM
The Elk Grove Technology Park is in the booming O’Hare industrial submarket

The Elk Grove Technology Park is in the booming O’Hare industrial submarket

If the greater Chicago-area industrial market is hot, the O’Hare submarket is truly en fuego.

The area around the airport had a vacancy rate of just 4.5 percent at the end of the first quarter, below the already healthy 5.9 percent vacancy rate in the suburbs, new data shows.

The research from commercial real estate firm Avison Young, first reported by GlobeSt.com, showed absorption came in at 520,000 square feet. Developers also had 1.84 million square feet of new space underway in the submarket at the end of the first quarter, an increase of 625 percent year-over-year.

“I’ve been working the O’Hare market for 28 years, and this is definitely the most amount of new product that we’ve seen coming to the market,” Avison Young’s Christopher Lydon told GlobeSt.com.

Warehouse and logistics tenants have fueled the demand as e-commerce sales show no signs of slowing down. Many of the industrial buildings near O’Hare are past their useful lives,  so developers are tearing them down and building new, modern facilities, Lydon said.

That’s left available space at a premium. Brennan Investment Group recently bought the 85-acre Busse Farm in Elk Grove Village with plans for a 1.2 million-square-foot industrial park.

“That was the last remaining vacant site in the O’Hare market,” Lydon said.

Rents in the submarket, meanwhile, hover around $20 per square foot — close to four times the suburban average, the report said. [Globe St.] — John O’Brien


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