Chicago’s booming industrial market continued to add inventory in the first quarter of 2020, but it’s unclear how the virus will impact leasing activity in the second quarter.
According to research from Colliers International, 16 spec projects were completed last quarter, bringing the total to 73.6 million square feet of Class A space over 275 buildings since 2013.
To date, industrial developers have had no trouble in filling the space. Nearly 75 percent of spec warehouse space delivered since 2013 has been leased up, according to RE Journals.
The I-55 and I-80 corridors have comprised nearly half of the spec development in the Greater Chicago area since 2013, and each sports an occupancy rate over 70 percent. The outlook looks even healthier in Lake County, where 87 percent of the spec product is leased; and in the northwest suburbs and the Central DuPage submarkets are over 90 percent in occupancy.
In all, there are 38 more spec projects under development, totaling 9.3 million square feet.
Though the coronavirus pandemic is likely to complicate leasing and result in longer lag times, the demand for logistics and warehouses should get even stronger in the long run, Colliers said. [RE Journals] — James Kleimann