CHICAGO—The latest uptick in leasing activity in the region's industrial market will almost certainly encourage developers to break ground on several more large industrial spaces in 2016. But developers may approach these tasks somewhat differently than was done in the recent past.

Clarius Partners, LLC, for example, finished a 1,001,184 square foot industrial building at 3851 Youngs Rd. in Joliet in 2013, but when a rush of potential users started knocking on the door last year, company officials were a bit surprised that a majority were only looking for between 650,000 and 750,000 square feet.

“We're still scratching our heads about it,” Kevin Matzke, managing principal of Clarius Partners, tells GlobeSt.com. The company just signed a user to more than 750,000 square feet, and that firm, which Crain's identified as Whirlpool, could still expand into the space remaining.

The tenant was represented in the transaction by JLL's Trevor Ragsdale, Keith Stauber and Steve Ostrowski. Clarius Partners was represented by Trevor Ragsdale, Grant Glattly and Michael Connor, also of JLL.

There are also a lot of other users looking for a space that matches the amount remaining in the building, so Matzke is clearly not worried about leasing up the property. But when Clarius officials launch a follow-up building on the site, possibly next year, they may adjust the size.

It may not be a big adjustment, and there may be no adjustment at all. “The quickest way to ensure the next user needs 1,000,000 square feet is to build a building with 750,000,” Matzke says. “But we're still evaluating the market,” and could construct something under that one million mark. The truly large users, those looking for about 1.2 million square feet or more, will most likely sign build-to-suit deals.

This confident but careful approach has been adopted by most, if not all of the region's major developers. It's a change from the go-go pre-recession days, when developers launched millions of square feet of speculative projects only to then see most of those buildings remain empty, sometimes for years. In 2008, the Chicago region had about seven available spaces with more than 750,000 square feet. “Obviously there was a glut,” Matzke says. Today however, “the supply of big blocks of space has been reduced down to one.”

All this activity has skewed the market somewhat in favour of landlords, he adds, but new construction should balance things out in 2016. And the big surge in leasing gives him a great deal of confidence in the Chicago region. Colliers International calculated that users absorbed 8.1 million square feet of space in the second quarter alone. “To have Chicago step up to become the number one or number two market in the country is phenomenal.”