Chicago real estate is all about warehouses these days

Industrial market stayed hot in Q2 as leases boomed, vacancy rate fell

3835 Youngs Road and a rendering of the Abt Electronics warehouse in Glenview (Meridian Design Build via Vimeo, Abt)
3835 Youngs Road and a rendering of the Abt Electronics warehouse in Glenview (Meridian Design Build via Vimeo, Abt)

 

Chicago industrial tenants signed 173 leases in the second quarter for 15.4 million square feet of space.

The total was a quarterly record, continuing the industrial market’s strong showing over the past year, Crain’s reported, citing Colliers International data.

One of the biggest takeaways from April through June was the drop in the vacancy rate to 6.29 percent from 6.68 percent in Q1, according to the report.

The vacancy rate was as low as 6.15 percent in 2019, a number the city appears to be rapidly approaching in a hot industrial market.

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Net absorption was another strong metric. During the first half of the year, net absorption stood at 14.7 million square feet, already surpassing the total for all of 2020. It is also projected to outpace the 26.6 million square feet in 2016, which set a record.

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By the end of the second quarter, 57 industrial properties were under construction, covering 30.1 million square feet, according to the report. Roughly 40 percent of those buildings started construction on spec.

The explosion of e-commerce during the pandemic and the increased need for last-mile warehouses and distribution centers also helped to fuel the boom. In May, Abt Electronics said it was planning to double its Glenview warehouse to more than 800,000 square feet and school bus maker Lion Electric inked a deal for a 900,000-square-foot plant in Joliet.

[Crain’s] — Holden Walter-Warner