Vacancy rate dips for Chicago’s bulletproof industrial market in Q1

Net absorption stood at 7M sf despite the pandemic’s crippling effect nationwide, according to Colliers

TRD CHICAGO /
Apr.April 17, 2020 10:12 AM
 Clockwise from left: 315 S. Hicks Road in Palatine; 4000 S. Racine Ave. in Chicago; 1600 North Boudreau Road in Manento (Credit: Google Maps)

Clockwise from left: 315 S. Hicks Road in Palatine; 4000 S. Racine Ave. in Chicago; 1600 North Boudreau Road in Manento (Credit: Google Maps)

The coronavirus crisis has crippled commerce across the U.S. but the industrial market has been resilient, and the Chicago-area continues to post strong numbers.

The local vacancy rate dipped to 6.16 percent in the first quarter, from 6.3 percent the year before, according to Crain’s, citing a Colliers International report.

Net absorption, or the change in the amount of leased space compared to the same period a year before, was 7.2 million square feet from January through March, according to the report. It was the second best quarter in the last four years, Colliers noted.

The continued rise in e-commerce has contributed to millions of square feet of warehouse space flooding the Chicago market. Amazon has been among the biggest players in recent months. Since September, the Jeff Bezos-led behemoth inked four leases and acquired a fifth property for a total of over 3.4 million square feet it will occupy or build out. Amazon is also in talks to buy a sixth property in Pullman it intends to develop into a warehouse.

But Amazon is not the only power player. Lowe’s will lease a 1.4 million-square-foot distribution center in Manteno that once was occupied by Sears, according to a February report. The deal is the largest industrial lease that the Chicago market has ever seen, not including build-to-suit warehouses.

Chicago industrial did hit a road bump at the end of 2019, with just 364,500 square feet of new supply delivered in Cook County, compared to 1.5 million square feet over the same period in 2018, according to NAI Hiffman. But there was a silver lining: Total square footage for projects under construction increased to 5 million square feet, from 3.8 million square feet in 2018.

The coronavirus has upended consumer habits, with increased demand on deliveries across the nation as most states remain under lockdown. That has put added pressure on the industrial supply chain, industry pros said.

“More and more people are accustomed to ordering online, whether it be goods and services or food and beverage. It’s going to accelerate,” Colliers’ David Bercu told Crain’s. [Crain’s] — Alexi Friedman 


Related Articles

arrow_forward_ios
Jeff Bezos and 2420 South Halsted Street (Getty, Google Maps)

Amazon adds to Chicago presence with Bridgeport warehouse

Amazon adds to Chicago presence with Bridgeport warehouse
Mark Zuckerberg and Facebook's proposed data center in Dekalb (Mandel Ngan/AFP/Getty)

Facebook is set to build an $800M server farm outside Chicago

Facebook is set to build an $800M server farm outside Chicago
6855 West 65th Street in Bedford Park & Steve Poulos of Bridge Development

Morgan Stanley fund buys industrial spec development for $22M

Morgan Stanley fund buys industrial spec development for $22M
Taurus Investment Holdings CEO Peter Merrigan and 4000 S. Racine (Credit: Google Maps)

Going strong: Another massive Chicago area industrial portfolio sells

Going strong: Another massive Chicago area industrial portfolio sells
1600 North Boudreau Road & Lowe’s CEO Marvin Ellison (Credit: Google Maps and Lowes)

Lowe’s strikes record industrial deal in Chicagoland

Lowe’s strikes record industrial deal in Chicagoland
Chicago’s industrial market saw just 364,000 square feet of new supply come online in the last three months of 2019, a sharp drop. (Credit: Google Maps)

Chicago industrial market slams brakes on new deliveries in Q4

Chicago industrial market slams brakes on new deliveries in Q4
From top: 5959 West Howard Street, 1109 East Lake Street and 3000 South Damen Avenue (Credit: Google Maps)From top: 5959 West Howard Street, 1109 East Lake Street and 3000 South Damen Avenue (Credit: Google Maps)

Here are the 5 top industrial sales in Chicagoland this year

Here are the 5 top industrial sales in Chicagoland this year
From left: Clarion Partners CEO David Gilbert, HSA Commercial Real Estate CEO Robert Smietana and 21530 Southwest Frontage Road 

DSC Logistics inks lease for 375K sf at massive spec warehouse

DSC Logistics inks lease for 375K sf at massive spec warehouse
arrow_forward_ios

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

Loading...