Key Takeaways |
Following a drop off during the second half of last year, new leasing activity picked up during the first quarter, totaling 12.1 million square feet among 127 new leases or expansions – a 30 percent increase over last quarter.
28 new leases greater than 100,000 square feet were signed, totaling 8.9 million square feet. Among those, seven were 300,000 square feet or greater, four of which were pre-leases in speculative buildings not yet delivered.
Record speculative construction deliveries pushed the industrial vacancy rate up for the first time since 2020, climbing by 3 basis points to 4.53 percent.
Rental rates continued to climb at an unprecedented rate, up nearly 16 percent year-over-year.
Developers completed 23 construction projects totaling 8.5 million square feet during the first quarter of 2023 and started construction on another 20 buildings totaling 5.7 million square feet, bringing the total under construction to 33 million square feet among 95 buildings.
Craig Hurvitz
Vice President
craig.hurvitz@colliers.com
+1 847 698 8295
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Chicago Industrial
Highlights
Industrial Leasing Stays
Hot in Chicago Market
23Q1
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23Q1
After peaking in 2021, the tight market limited options for tenants until new construction came online
New leasing activity picked up again during 23Q1
Demand over the past eight quarters has totaled 86 million square feet
Net absorption still above the 5-year average
Grant Levin
Research Analyst
grant.levin@colliers.com
+1 847 444 5730
As more modern space comes online, it will encourage real estate decisions that may have been postponed due to the tight market, leading to continued strong demand.
For Colliers | Chicago's most up-to-date market analyses
please visit the research section of our website.
The e-commerce giant played its biggest role in 2020 and 2021, but has dropped off since
Amazon’s contribution to demand has dropped to zero
This rate will continue to climb throughout 2023 due to record speculative construction
Vacancy rate increased slightly for first time since 2020
near two percent or below
Vacancy remained near record lows in infill submarkets
near two percent or below
Spec development pushing up vacancy in big box submarkets
23Q1 largest new industrial leases
7 new leases greater than 300,000 signed during 23Q1
New leases greater than 500,000 SF signed per year
Mega-sized leases in new spec buildings still strong
Space under construction by quarter and type
Construction pipeline showed first signs of slowing
Total speculative construction deliveries by year and occupancy
Recently-completed spec leasing better than ever
Total spec delivered since 2013 by submarket and percent leased
Average asking net rent up a record 15.8% year-over-year
1 Chicago North
2 Chicago South
3 O’Hare
4 North Suburbs
5 Lake County
6 Central DuPage
7 Northwest Suburbs
8 I-290 North
9 I-290 South
10 South Suburbs
11 Elgin I-90
12 McHenry County
13 Fox Valley
14 I-88 Corridor
15 I-55 Corridor
16 DeKalb County
17 Far South Suburbs
18 Northwest Indiana
19 Southeast Wisconsin
20 I-80 Joliet Corridor
21 I-39 Corridor
22 Rockford Area
23Q1 Metro Chicago Industrial Totals
Metro Chicago Totals
Chicago Industrial | Market Statistics
Vacancy Rate
Net Absorption
Total Inventory
Construction Completions
Under Construction
New Leasing Activity
Average Asking Rental Rate
Industrial Inventory
4.53%
7,418,024 SF
1,500,844,563 SF
8,517,019 SF
33,182,070 SF
12,073,939 SF
$5.98 PSF Net
1,500,844,563 SF
Metro Chicago Totals
Total Inventory SF
Completions SF
Under Construction SF
New Vacancies SF
Vacant Space SF
Vacancy Rate
New Leasing Activity SF
User Sale Activity SF
Net Absorption SF
87,844,248
893,399
0
1,450,237
8,902,460
10.13%
1,456,986
75,625
1,332,278
Chicago North
Total Inventory SF
Completions SF
Under Construction SF
New Vacancies SF
Vacant Space SF
Vacancy Rate
New Leasing Activity SF
User Sale Activity SF
Net Absorption SF
86,950,849
0
893,399
257,311
9,026,617
10.38%
412,911
27,625
314,722
Chicago South
Total Inventory SF
Completions SF
Under Construction SF
New Vacancies SF
Vacant Space SF
Vacancy Rate
New Leasing Activity SF
User Sale Activity SF
Net Absorption SF
142,110,992
112,000
1,344,416
2,038,408
2,532,534
1.78%
2,659,268
311,826
849,976
O'Hare
Total Inventory SF
Completions SF
Under Construction SF
New Vacancies SF
Vacant Space SF
Vacancy Rate
New Leasing Activity SF
User Sale Activity SF
Net Absorption SF
57,748,116
601,276
0
582,100
1,191,592
2.06%
595,240
269,983
1,019,492
North Suburbs
Total Inventory SF
Completions SF
Under Construction SF
New Vacancies SF
Vacant Space SF
Vacancy Rate
New Leasing Activity SF
User Sale Activity SF
Net Absorption SF
78,147,330
133,136
677,447
2,307,872
5,591,525
7.16%
1,491,248
833,636
445,309
Lake County
Total Inventory SF
Completions SF
Under Construction SF
New Vacancies SF
Vacant Space SF
Vacancy Rate
New Leasing Activity SF
User Sale Activity SF
Net Absorption SF
76,488,702
337,911
911,344
1,601,353
1,648,540
2.16%
3,032,321
482,289
2,183,396
Central DuPage
Total Inventory SF
Completions SF
Under Construction SF
New Vacancies SF
Vacant Space SF
Vacancy Rate
New Leasing Activity SF
User Sale Activity SF
Net Absorption SF
37,690,073
466,023
250,000
997,852
1,950,560
5.18%
419,202
156,721
281,490
Northwest Suburbs
Total Inventory SF
Completions SF
Under Construction SF
New Vacancies SF
Vacant Space SF
Vacancy Rate
New Leasing Activity SF
User Sale Activity SF
Net Absorption SF
77,243,413
649,844
909,666
814,561
3,040,885
3.94%
1,996,432
285,330
1,083,650
I-290 North
Total Inventory SF
Completions SF
Under Construction SF
New Vacancies SF
Vacant Space SF
Vacancy Rate
New Leasing Activity SF
User Sale Activity SF
Net Absorption SF
47,319,002
0
409,245
310,142
992,177
2.10%
419,041
167,860
339,721
I-290 South
Total Inventory SF
Completions SF
Under Construction SF
New Vacancies SF
Vacant Space SF
Vacancy Rate
New Leasing Activity SF
User Sale Activity SF
Net Absorption SF
112,218,483
718,200
1,497,050
956,336
4,187,119
3.73%
1,979,879
307,126
2,327,765
South Suburbs
Total Inventory SF
Completions SF
Under Construction SF
New Vacancies SF
Vacant Space SF
Vacancy Rate
New Leasing Activity SF
User Sale Activity SF
Net Absorption SF
35,109,936
0
1,860,320
919,807
1,193,246
3.40%
1,159,404
465,945
850,049
Elgin I-90
Total Inventory SF
Completions SF
Under Construction SF
New Vacancies SF
Vacant Space SF
Vacancy Rate
New Leasing Activity SF
User Sale Activity SF
Net Absorption SF
29,998,181
0
0
12,000
2,967,354
9.89%
0
22,630
90,680
McHenry County
Total Inventory SF
Completions SF
Under Construction SF
New Vacancies SF
Vacant Space SF
Vacancy Rate
New Leasing Activity SF
User Sale Activity SF
Net Absorption SF
36,982,434
141,855
1,906,858
602,520
1,112,050
3.01%
894,548
113,028
595,603
Fox Valley
Total Inventory SF
Completions SF
Under Construction SF
New Vacancies SF
Vacant Space SF
Vacancy Rate
New Leasing Activity SF
User Sale Activity SF
Net Absorption SF
77,691,825
340,193
1,571,451
1,419,188
3,380,550
4.35%
1,568,184
472,896
1,354,616
I-88 Corridor
Total Inventory SF
Completions SF
Under Construction SF
New Vacancies SF
Vacant Space SF
Vacancy Rate
New Leasing Activity SF
User Sale Activity SF
Net Absorption SF
104,323,528
1,685,440
2,142,036
2,715,060
1,507,122
1.44%
4,318,884
74,331
3,622,050
I-55 Corridor
Total Inventory SF
Completions SF
Under Construction SF
New Vacancies SF
Vacant Space SF
Vacancy Rate
New Leasing Activity SF
User Sale Activity SF
Net Absorption SF
22,929,078
0
2,400,000
147,650
1,204,407
5.25%
140,970
35,000
28,320
DeKalb County
Total Inventory SF
Completions SF
Under Construction SF
New Vacancies SF
Vacant Space SF
Vacancy Rate
New Leasing Activity SF
User Sale Activity SF
Net Absorption SF
49,895,896
0
897,000
382,964
2,422,639
4.86%
300,428
0
-82,536
Far South Suburbs
Total Inventory SF
Completions SF
Under Construction SF
New Vacancies SF
Vacant Space SF
Vacancy Rate
New Leasing Activity SF
User Sale Activity SF
Net Absorption SF
56,326,869
261,638
624,834
0
3,223,551
5.72%
521,475
0
754,854
Northwest Indiana
Total Inventory SF
Completions SF
Under Construction SF
New Vacancies SF
Vacant Space SF
Vacancy Rate
New Leasing Activity SF
User Sale Activity SF
Net Absorption SF
72,103,858
2,888,532
6,644,477
2,498,255
4,280,214
5.94%
2,620,356
87,580
2,463,979
Southeast Wisconsin
Total Inventory SF
Completions SF
Under Construction SF
New Vacancies SF
Vacant Space SF
Vacancy Rate
New Leasing Activity SF
User Sale Activity SF
Net Absorption SF
106,428,887
3,125,268
4,143,103
2,023,561
4,880,042
4.59%
2,526,936
16,500
2,881,687
I-80 Joliet Corridor
Total Inventory SF
Completions SF
Under Construction SF
New Vacancies SF
Vacant Space SF
Vacancy Rate
New Leasing Activity SF
User Sale Activity SF
Net Absorption SF
17,919,915
0
0
125,150
617,645
3.45%
0
125,150
0
I-39 Corridor
Total Inventory SF
Completions SF
Under Construction SF
New Vacancies SF
Vacant Space SF
Vacancy Rate
New Leasing Activity SF
User Sale Activity SF
Net Absorption SF
60,875,346
560,129
500,000
322,475
5,119,205
8.41%
455,473
45,990
972,057
Rockford Area