Chicago industrial market report

Q1 2022

The Chicago industrial market had a record-breaking year in 2021 across all market fundamentals and continued that momentum throughout the first quarter of 2022. Overall vacancy continued to decrease, down to 4.7%, as leasing activity surged to 18.2 msf at the end of the first quarter. Cost of land within the market has continued to spike as developers race to secure sites for future developments with more than 30 msf currently under construction. Construction timelines are still extremely challenged with the increased lead time on materials taking an additional six months, on average, to deliver new space to the market since the start of the pandemic.

15.4%

Rental growth

Historically low vacancies have allowed landlords to push asking rates to new heights as demand continues across the Chicago market. Rental rates have increased 15.4% since 2016. 

4.7%

Vacancy

The overall vacancy rate reached an all-time low of 4.7% at the end of Q1 2022, a decrease of 50 basis points from the prior quarter. The Chicago industrial market continues to outperform, despite all the challenges and uncertainty throughout the pandemic.

18.2 msf

Activity

A total of 18.2 msf was leased during Q1 2022, largely been driven by companies in the transportation/trucking industry, 3PL providers and food production/freezer cooler space.  

45.6%

Industrial demand

45.6% of properties currently under construction are more than 750,000 sf, highlighting the demand within big box product across the market.

4.3 msf

South I-55 Corridor

The South I-55 Corridor remains extremely active with 4.3 msf having been leased. This represents 23.7% of overall leasing volume within the first quarter.

3.0 msf

I-80 Corridor

The I-80 Corridor has seen a spike in construction activity, adding an additional 3 msf to the development pipeline in the first quarter of 2022 with a total of 9.4 msf underway.

 

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