The 23% drop-off from the second half of 1999 followed a first half that saw 5.1 million sf of build-to-suit activity, which was a 25% jump over the first half of 1999.

"The first half of the year was the busiest on record, leading to over-optimistic projects about the second half, which were debunked by the softening in the market," says vice president Thomas M. Boyle. "It is important to note, however, that vacancy rates remain healthy in the major submarkets, which indicates a relative balance of supply and demand." However, there are concerns about the technology sector, Boyle adds. "Only time will tell if all the deals signed in 2000 will be completed as planned."

Not even southwest suburban Will County, the busiest county for build-to-suits last year with nearly 3.1 million sf, was not immune to the second-half swoon. The Will County market saw 2.1 million sf of build-to-suit activity in the first half of 2000, a 36% jump from the first half of 1999. But after three million sf in the second half of 1999, build-to-suit activity fell to 981,000 sf in the second half of 2000, a 67% drop from the previous year. That meant Will County's build-to-suit activity for the year was down 32% in terms of square footage from 1999, even though the number of projects remained the same at 19.

"Part of this can be attributed to the re-emergence of DuPage County where more pad-ready sites came on the market," Boyle says.

DuPage County saw a 55% jump in build-to-suit activity last year to more than 2.5 million sf, with second-half activity soaring 124% over 1999 to more than 1.3 million sf.

Exemplifying the market's continued westward expansion, Kane County saw a 94% jump in build-to-suit activity to about 1.6 million sf, including a 45% jump in the second half to 829,000 sf.

Lake County also was busier in 2000 than the previous, as well as posting a second-half gain, though on a much smaller scale. Total build-to-suit activity was up 6% for the year to more than 1.1 million sf, with a second-half boost of 8% to just under 1 million sf.

Instant Insights /

Signs of Slowdown in Build-To-Suit Market

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