There was a time when the multifamily market was the only darling in commercial real estate. That sector remains hot. But the industrial market is starting to catch up. And in Chicago? The industrial market is soaring.
The latest industrial report from Chicago’s NAI Hiffman provides the latest evidence that the Chicago-area industrial market is in the middle of a sustained hot streak.
Just look at the numbers: The Chicago industrial market saw 3 million square feet of positive absorption in the first quarter. At the same time, its vacancy rate fell to 7.84 percent.
This has inspired a surge in new construction in the area, with NAI Hiffman reporting that 12.7 million square feet of industrial space is now under construction in the market. The Chicago industrial market also saw 3 million square feet of new industrial space completed during the first quarter.
These positive numbers are welcome. Chicago is the most influential industrial market in the Midwest, and one of the most important in the country. As NAI Hiffman says, Chicago is the second-largest industrial market in the country, with more than 1.2 billion square feet of inventory. This is second only to the industrial market in the greater Los Angeles area.
What’s behind Chicago’s strong first-quarter performance? An improving local economy is helping. But Chicago is also becoming more important to manufacturers as an inland port. The region also benefits from a diverse and comparatively low-cost labor force.
You can’t discount the city’s location, either. Chicago rests within a single day’s drive of one-third of the country’s population, and is in the path of three of the United States’ busiest transcontinental expressways — Interstates-80, -90 and -94).
The best news from the NAI Hiffman report? The experts at this company predict that the Chicago industrial market is only going to get stronger in the months to come. That’s good news for anyone hoping for a more sustained economic recovery in Chicago and the rest of the Midwest.