Speculative industrial development is still going strong for one heavy-hitter at least.
Trammell Crow Company started construction on a 788,000-square-foot warehouse project about 40 miles southwest of downtown Chicago.
It will be the first speculative warehouse built in the Plainfield Business Center, at 26220 West 143rd Street, when it’s completed next fall according to a news release. CBRE’s Matt Mulvihill and Phil DeBoer, who represented Trammell Crow Company, a subsidiary of CBRE, in the land acquisition, are spearheading marketing and leasing efforts for the new property.
The project enters a Chicago industrial market experiencing record-high construction levels and a surge in speculative warehouse developments. Over 65 million square feet of industrial space was under construction across the metro in the third quarter, with build-to-suit representing the bulk of development, according to Colliers. Spec development has fallen off a bit, with 27 million square feet delivered in the third quarter, the second-lowest amount since 2021.
Net absorption, the rate at which vacant space is being filled, remained positive in the third quarter, but it declined from the previous quarter. That shift suggests a more cautious approach from tenants, who are leasing space more selectively amid economic uncertainty, especially in secondary areas.
The influx of construction, combined with slightly lower tenant demand, has created a scenario where vacancy rates could rise if space outpaces demand. Nonetheless, Chicago’s core industrial submarkets have managed to balance out these effects, keeping overall vacancy stable at 4.88 percent.
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Despite some regional challenges, core submarkets such as the Far Southwest suburbs remain highly attractive due to their strategic access to major transit routes, robust infrastructure and e-commerce and logistics demand.
Trammell Crow’s project sits on 50 acres and is strategically positioned near interstates 55 and 80. When fully built out, the Plainfield Business Center will span over 8 million square feet, designed to serve large-scale users.