Chicago industrial market facing high demand, supply chain issues

All-time low vacancy rate could be set this quarter

Chicago /
Jan.January 25, 2022 04:20 PM

Apex Logistics at 3701 Centrella St, Franklin Park (Google Maps)

Rising rents and construction costs could cool Chicago’s industrial real estate market.

Developers are scrambling to find new land for warehouses as soaring demand pushes big developments further from Chicago’s city center, according to Crain’s. Supply chain bottlenecks are becoming an issue.

“The biggest risk is that uncertainty,” broker Matt Stauber, executive vice president in Collier’s Rosemont office, told Crain’s.

Companies looking to rent developed properties find themselves victims of the hot market.

“Many landlords are almost afraid to commit to deals, because if they wait another month, (rents) are going to go up,” Stauber said.

Near O’Hare International Airport, prices have climbed into the double digits from $8 per square foot a year ago, Crain’s reported, citing Stauber. About 50 million square feet of industrial space was leased last year.

Despite some leading headwinds, Craig Hurvitz, Colliers’ vice president of research for the Chicago market, told Crain’s he expects the all-time low vacancy rate of 5.39 percent, set in the third quarter of 2000, to fall this quarter.

E-commerce companies have been contributing to the surge in demand for industrial space. Amazon, Target and Wayfair have expanded into the Chicago market as online shopping increases. That’s had a trickle-down effect on logistics firms that service the e-commerce industry. At the end of last year, Apex Logistics leased a nearly 300,000-square-foot warehouse under construction in Bensenville.

Companies are also looking for bigger spaces. The number of leases over 500,000 square feet signed in 2021 more than doubled in number in 2019, according to Hurvitz. Earlier this year, Ridgeline Properties announced a 7-million-square-foot development project in the small town of Minooka, Ill.

[Crain’s] – Harrison Connery





    Related Articles

    arrow_forward_ios
    500 N. Michigan Avenue (Google Maps)
    Owner shops Mag Mile office tower for residential uses
    Owner shops Mag Mile office tower for residential uses
    4300 Brandon Road in Joliet (Loopnet, iStock)
    Chicago industrial inventory collapses to record low, development sets record high
    Chicago industrial inventory collapses to record low, development sets record high
    The Boeing Headquarters with Boeing CEO Dave Calhoun (Boeing, Flikr via Ian Abbott, iStock)
    Boeing moving headquarters out of Chicago in another blow to city’s office market
    Boeing moving headquarters out of Chicago in another blow to city’s office market
    Alderman Walter Burnett, Bally's Soo Kim and Chicago mayor Lori Lightfoot (Getty Images, Burnett, Bally's, Wikimedia Commons, Illustration by Kevin Cifuentes for The Real Deal)
    Chicago’s casino selection goes to Bally’s, and these real estate players win out
    Chicago’s casino selection goes to Bally’s, and these real estate players win out
    105 W. Adams Street (LoopNet)
    Troubled Loop office tower touted as apartment conversion
    Troubled Loop office tower touted as apartment conversion
    Bally’s Casino tribune proposal with Lori Lightfoot (Ballys, Getty)
    Bally’s proposal for Chicago casino seen winning mayor’s approval
    Bally’s proposal for Chicago casino seen winning mayor’s approval
    Jeff Shapack and 509 North Union Avenue, Chicago (Google Maps, iStock)
    Developer Shapack buys Chicago Salvation Army site for $25M
    Developer Shapack buys Chicago Salvation Army site for $25M
    Evangeline Gouletas and Cité restaurant in Lake Point Tower (Cité Restaurant)
    Rooftop restaurant in Chicago’s Lake Point Tower for sale amid bankruptcy
    Rooftop restaurant in Chicago’s Lake Point Tower for sale amid bankruptcy
    arrow_forward_ios

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

    Loading...