Chicago's Industrial Market Breaks Leasing and Spec Records in 2019
A record 38 million square feet of new leases and lease expansions were signed during 2019 among 460 leases. The fourth quarter of the year set a record of its own, with 11.6 million square feet of new leasing volume recorded, although 3.9 million square feet of that activity was build-to-suit leases or pre-leases in planned or under construction speculative development buildings, which won't impact the market statistics until the projects are delivered.
Developers set a record as well, delivering 52 speculative projects totaling 15.1 million square feet during 2019, more than any other year during the current development cycle. Speculative deliveries totaled 4.7 million square feet during the fourth quarter of 2019 alone, the greatest quarterly total since 2017.
This influx of new speculative space, much of which was delivered vacant, resulted in the market's vacancy rate increasing by 10 basis points to 6.25 percent during the final quarter of the year. The slight increase follows eight consecutive quarters of vacancy rate decreases. The current rate is nine basis points below the 6.34 percent rate recorded at the end of 2018 and remains one of the lowest rates recorded since 2001.