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Commercial
Chicago

Chicago’s industrial strength continued in Q1

Vacancy rate ticked down and 9M sf of warehouse space was completed

3501 Brandon Road, Joliet, IL (CREXI)
Walmart inked a 1.1 million-square-foot lease in Joliet last month, contributing to a strong first-quarter industrial market in Chicago. (CREXI)

The Chicago industrial market was among the best-performing real estate sectors last year, and that continued in the first quarter of 2021.

From January through March, the industrial vacancy rate ticked down to 6.68 percent, from 6.73 percent in Q4 2020, according to Crain’s, citing Colliers data.

That’s not as sterling as the 6.15 percent vacancy recorded in 2019, but it crushes local retail and office markets, where vacancies have soared in the past year.

The industrial market, meanwhile, has been buoyed by the rise in e-commerce, and developers have been responding with new construction. From January through March, work finished on a little over 8.5 million square feet of new warehouse space across 15 buildings, according to the report.

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Developers have millions more square feet in the pipeline for 2021. In the first quarter, work was underway on 42 more buildings totaling more than 24 million square feet, Crain’s reported from the Colliers report.

Net absorption — the total space added minus what was vacated — stood at 7.2 million square feet in Q1, about the same as at the start of 2020.

Among the robust industrial activity, Wayfair said it will build a 1.2 million-square-foot fulfilment center in Romeoville and Walmart will lease a 1 million-square-foot space in Joliet. Amazon, which inked 21 leases for nearly 12 million square feet in the Chicago area last year, only took a bit over 400,000 square feet in the first quarter, according to the report. The e-commerce behemoth did pay $45 million for a massive industrial site in Gage Park, however.

[Crain’s] — Alexi Friedman 

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