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2020 Q3 Chicago Industrial Big Box Report

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Big Box Demand Still Positive Despite Vacancy Rate Jump

The chaos of 2020 continued through the third quarter of the year, impacted by the surging Coronavirus pandemic, election uncertainty, and historic swings in both the U.S. and global economies.

Despite the turmoil, Chicago’s biggest and most modern industrial buildings pressed on, recording yet another quarter of positive net absorption, totaling 1.2 million square feet between July and September. Positive demand was reported in half of the 22 industrial submarkets tracked, led by the I-80 Joliet Corridor, where two big box leases resulted in net absorption totaling 1.45 million square feet.

Although net absorption was positive during the third quarter of 2020, eight big box speculative construction projects totaling 2.9 million square feet were delivered, 93 percent of which was vacant. These deliveries, combined with several new vacancies being introduced in second generation space, pushed the big box vacancy rate up 94 basis points to 8.77 percent, the highest rate recorded since the fourth quarter of 2018.

Seventeen new leases and two lease expansions totaling 4.2 million square feet were signed in big box buildings during the quarter, the lowest quarterly new leasing volume since the second quarter of 2019. Since 2017, this figure has averaged 4.4 million square feet per quarter. 

More big box space is under construction than at any time in the market’s history, totaling 16.7 million square feet among 22 buildings. Contrary to earlier in the development cycle, 70 percent of the big box space under construction are build-to-suit projects.


Industrial Big Box Report Chicago

2020 Q3 Chicago Industrial Big Box Report

Download Report