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2021 Q2 Chicago Industrial Market Report

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Record-Breaking Leasing Activity Pushes Chicago’s Industrial Market Into Higher Gear

Tenants signed 173 new leases and lease expansions larger than 10,000 square feet during the second quarter of 2021 totaling 15.4 million square feet – the greatest quarterly new leasing volume ever recorded in the Chicago industrial market. This activity follows on the heels of two quarters where the new leasing volume fell into the top six greatest quarterly totals. Not only have established users been expanding, Chicago’s robust and diverse industrial market has been attracting new companies as well.

Big leases greater than 500,000 square feet have played a significant role – while few leases in that size range were signed prior to 2019, 16 were signed in 2020 and 10 have already been signed during the first half of 2021.

As a result, net absorption – an indicator used to measure demand – has been impressive. Through the first two quarters of 2021, net absorption totaled 14.7 million square feet, eclipsing the 14.2 million square feet recorded during all four quarters of 2020, and is on pace to set an annual record.

The industrial vacancy rate decreased by a remarkable 39 basis points to 6.29 percent between April and June, the lowest rate recorded since the first quarter of 2020 before the pandemic took hold. The vacancy rate in eight of the 22 industrial submarkets tracked were at or near all-time lows, particularly in infill areas close to Chicago’s large population and labor resources.

More than 30 million square feet is under construction for the first time in the market’s history. 59 percent of that space are build-to-suit projects while the remaining 41 percent are being built on a speculative basis. Nine buildings greater than one million square feet are actively under construction.

Key Takeaways

  • New leases and lease expansions totaled 15.4 million square feet during the second quarter, a new record.
  • The industrial vacancy rate has dropped by 44 basis points over the past six months, returning to pre-pandemic levels. Vacancy in several submarkets is at or near all-time lows.
  • More than 30 million square feet is under construction, a new record. 59 percent of that activity are build-to-suit projects

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2021 Q2 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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