2020 Is Over. Chicago's Industrial Market Was Unstoppable, Setting New Records Again
A pandemic, an economic recession, and political unrest didn't stop Chicago's industrial market during 2020. Records were overcome once again - a record 48.6 million square feet of new leases were signed during the year. This represents a 28 percent increase over the 38 million square feet of new leasing volume recorded in 2019, the previous record. 29.6 million square feet is under construction, including 12 buildings greater than one million square feet - both new records.
While the industrial vacancy rate increased during the final three quarters of the year due to new vacancies being introduced in both second generation buildings and new speculative developments, it ended the year at 6.73 percent, only 48 basis points above the 6.25 percent rate recorded at the end of 2019, and well below the 12.31 percent peak recorded in 2010 following the previous recession.
Net absorption was positive during all four quarters of 2020, totaling 14.2 million square feet for the year. Although this is below the 2019 total of 21.4 million square feet, net absorption surged during the final quarter of 2020 totaling 5.5 million square feet, a sign of building demand.
Build-to-suit activity set records in 2020 as well. Build-to-suit leases totaled 12.1 million square feet in 2020, and represented 25 percent of the 48.6 million square feet of new leasing activity recorded. At the end of the year, 19 build-to-suit projects totaling 20.4 million square feet were underway, accounting for 69 percent of the product under development. 11 of the 12 buildings greater than one million square feet under construction are build-to-suit facilities.