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2021 Q1 Chicago Industrial Market Report

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Demand for Chicago Industrial Grows Again, Matching Pre-Pandemic Levels

Industrial demand, measured by net absorption and new leasing volume, increased during the first quarter of 2021 for the third consecutive period. Both indicators returned to pre-pandemic levels – net absorption between January and March totaled 7.2 million square feet, matching the impressive net absorption recorded during the first quarter of 2020 before the pandemic took hold. New leases and lease expansions totaled 13.8 million square feet, a 24 percent increase over the strong 11.1 million square feet of new leasing activity recorded during the fourth quarter of 2020.

As a result of the demand recorded, the overall vacancy rate decreased by 5 basis points to 6.68 percent during the first quarter of 2021, the first decrease recorded since the first quarter of 2020. The vacancy rates in eight of the 22 industrial submarkets tracked are near all-time lows, particularly in infill areas close to Chicago’s large population and labor resources.

Development activity remains robust, with a near-record 24.2 million square feet under construction, 69 percent of which are build-to-suit projects. Eight buildings greater than one million square feet are actively under construction, all of which are build-to-suit facilities or pre-leased to a single tenant.

Key Takeaways

  • Net absorption, a metric used to measure demand, totaled 7.2 million square feet, matching the demand recorded one year ago before the pandemic took hold.
  • The vacancy rate decreased during the first quarter of 2021 for the first time in four quarters.
  • New leases totaled 13.8 million square feet, the third quarter in a row this figure has increased. 

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2021 Q1 Chicago Industrial Market Report

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Craig Hurvitz

Senior Director of Research

Chicago - Rosemont

I am vice president, market research at Colliers International | Chicago and lead the Industrial Advisory Group’s market research initiative. I am responsible for managing and maintaining the industrial properties database, which includes property sales and leases, tenant information and comparable transactions. I have a deep understanding of the Chicago-area industrial real estate market and provide in-depth analyses, reports and market trends that are referenced by a diverse group of clients including landlords, appraisers and developers. I am considered an expert in the field and am frequently featured in industry newspapers and publications. 

I have more than 10 years of industry experience having served as the director of research for both NAI Hiffman, and most recently Newmark Grubb Knight Frank. In this role, I oversaw the local research departments and provided comprehensive reports on market statistics in the Chicago and regional commercial real estate markets.

I began my real estate career as director of marketing for Rosemont-based Epic Realty Partners, now affiliated with Transwestern. 

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