"We're seeing the effects of shock therapy to the economy," says Richard M. Gatto, EVP of the Alter Group. "Lower interest rates have spurred firms to own their own buildings rather than lease."

The report showed that a predominance, 87%, of the new build-to-suit space in the first half of 2001 was manufacturing or warehouse space, a fact somewhat at odds with the manufacturing slump that has afflicted the Chicago area for at least 18 months.

On the other hand, those industrial businesses that are weathering the slump may have the wherewithal to take advantage of low interest rates to invest in their own real estate. The largest Chicago-market build-to-suit in the first half of 2001 was an 800,000-sf industrial facility for SLS Inc. in southwest suburban Manteno, IL. SLS, a Pennsylvania-based company, makes precision medical and electronic instruments. SLS has posted lower profits in recent quarters but is still operating in the black.