Chicago Industrial Vacancy Rate Sinks Below 7%

Amazon has decided to occupy this 746K spec building, developed by Hillwood, in Joliet.

CHICAGO—The Chicago area industrial market continues to thrive, according to a new report on the second quarter by Colliers International. Developers finished another sixteen new buildings totaling 4.6 million square feet, and 61.4% of that work was done on a speculative basis. Perhaps most impressive, however, was the level of tenant demand. Users absorbed another 5.3 million square feet, bringing the year-to-date total up to 14.3 million square feet and sending the vacancy rate down to just 6.91%, the first time that figure sank below 7.0% in 15 years.

“Demand for space continued to outpace the effects of new speculative construction completions, many of which have been delivered to the market at least partially vacant,” the report says. And the vacancy rate is now below 6.0% in nine of the region’s 22 submarkets, with the O’Hare submarket leading the way at just 4.21%. That’s an amazing turnaround from five years ago, when it was 13.17%. The greater need for distribution buildings has benefitted the land-scarce submarket, due to the proximity of the airport and the many highways that connect it to the rest of the metro area.