Another Record Breaking Quarter for Chicago Industrial - But What's Next?
Chicago's industrial market set another record during the first quarter of 2020, recording 14.6 million square feet of new leasing volume among 99 new leases and lease expansions. Seven leases greater than 500,000 square feet were signed totaling 8.3 million square feet. During all of 2019, a total of ten leases greater than 500,000 square feet were signed, while only five leases in this size range were signed in 2017. Three of the largest leases signed during the first quarter were for build-to-suit projects, totaling 4.6 million square feet.
The industrial vacancy rate decreased by nine basis points since December to 6.16 percent, one of the lowest rates recorded in the market since 2001. Industrial vacancy has historically been closely tied to and has slightly lagged the U.S. unemployment rate. With the Coronavirus pandemic and the immediate economic response erupting at the end of the first quarter, the unemployment rate is poised to skyrocket. While certain segments of Chicago's industrial market will perform comparatively well, the overall vacancy rate is expected to escalate as well.