Chicago industrial industrial rents hit record high in Q2: report

Chicago /
Jul.July 05, 2018 05:00 PM

Spec building under construction (Credit: Marina Crossings)

The Chicago industrial market remained hot in the second quarter as asking rents hit a record high of $5.58 per square foot.

Vacancy rates essentially remained even, inching up from 8 percent to 8.1 percent, despite the delivery of more than 2 million square feet of speculative space, according to Newmark Knight Frank’s second quarter industrial market report.

Asking rents were highest on the North Side of the city, where they averaged $8.15 per square foot. Not far behind was southern DuPage County, where they averaged $7.86.

Asking rents averaged $6.62 in the O’Hare submarket, and $5.06 on the South Side of the city, where a 633,000-square-foot spec building is projected to come online this year.

The second quarter produced strong results on the sales side as well, with more than $1.6 billion in investment sales, up nearly 28 percent year over year. The report singled out Blackstone Group’s acquisition of some 4 million square feet of industrial space in the Chicago area as part of a $1.8 billion industrial portfolio buy from Cabot Industries.

“Moving forward, investors will remain focused on larger warehouses and last-mile distribution centers,” the report said, adding Chicago industrial investment sales could have another record-breaking year.

The good news, though, was tempered by the reminder that 10.5 million square feet is expected to deliver by the end of this year, much of it speculative, which could lead vacancy rates to rise.

Count Equity International founder and chairman Sam Zell among those skeptical about demand for all that industrial space, despite surging e-commerce sales.

“My guess is that it’s getting too exciting and we’re building too much industrial space,” Zell told Bloomberg in an interview in April. “I think we got a lot of people owning industrial space today and I’m not sure there are enough tenants.”


Related Articles

arrow_forward_ios
Liberty Mutual at 27201 Bella Vista in Warrenville (Google Maps)

Chicago’s Q3 suburban office market hits highest vacancy in decade

Chicago’s Q3 suburban office market hits highest vacancy in decade
Mayor Lori Lightfoot (Getty, iStock)

Lightfoot to propose $94M property tax hike

Lightfoot to propose $94M property tax hike
Brian Whiting, CEO of Telos Group, and the Old Post Office (Credit: Google Maps)

Lonely at the top: 601W Cos. opens Old Post Office rooftop park in WFH world

Lonely at the top: 601W Cos. opens Old Post Office rooftop park in WFH world
Cars.com CEO Alex Vetter and the building (Credit: Google Maps)

Cars.com wants to shrink its space at West Loop HQ

Cars.com wants to shrink its space at West Loop HQ
Thor Equities’ Joseph Sitt and Palmer House Hilton at 17 East Monroe Street (Google Maps)

Thor’s Palmer House hit with $300M+ foreclosure suit

Thor’s Palmer House hit with $300M+ foreclosure suit
Cook County Assessor Fritz Kaegi and downtown Evanston

Cook County landlords get bad news about 2020 taxes

Cook County landlords get bad news about 2020 taxes
Chicago Mayor Lori Lightfoot and the power plant (Credit: KAMIL KRZACZYNSKI/AFP via Getty Images, and Google Maps)

Following protests, Lightfoot calls off second demolition in Little Village

Following protests, Lightfoot calls off second demolition in Little Village
Joe Sitt and 905 W. Fulton Market (Credit: Thor Equities)

Thor Equities’ big bet on Fulton Market is paying off

Thor Equities’ big bet on Fulton Market is paying off
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...