by Dan Rafter
The Chicago industrial market entered 2017 on a strong note, with vacancies still low and net absorption rising, according to the most recent research from Cushman & Wakefield.
According to the company’s fourth quarter Chicago industrial report, the industrial vacancy rate in Chicago stood at 6.3 percent at the end of the last quarter of the year. That’s down just a bit from the 6.4 percent vacancy rate in the Chicago industrial market at the end of 2015.
The Chicago market saw plenty of absorption, too. Cushman & Wakefield reported that the Chicago industrial market absorbed 22.7 million square feet in 2016, up from 15.6 million square feet the year before. Developers also have 20.8 million square feet of industrial space under construction in the Chicago market.
Average asking price remained mostly the same as in 2015, with Cushman & Wakefield reporting that the industrial market’s average asking rent ended 2016 at $4.76 a square foot. That’s down just a bit from the average of $4.85 a square foot at the end of 2015.
What submarkets showed the most industrial activity in 2016? Cushman & Wakefield pointed to the Interstate-80 corridor submarket, which saw nearly 7.9 million square feet of industrial space leased in 2016. That accounted for 22.4 percent of all the industrial leasing in the Chicago market in 2016.
General Mills signed the largest industrial lease in the fourth quarter, 1.5 million square feet in the Interstate-80 corridor. E-commerce tenants signed the second- and third-largest leases, for just under 955,500 square feet in the Southern Fox Valley region and 627,000 square feet in the Lake County submarket.
In good news for commercial real estate pros working this market, Cushman & Wakefield predicted that the industrial market shows no signs of slowing in 2017. The company said that demand for Chicago industrial space will remain high from both investors and tenants.