Chicago Industrial Construction Projects Reach Historic Highs Amidst Pandemic

In a second-quarter 2020 Chicago Industrial Construction Review by Colliers International 52 projects totaling 27.2 million square feet are under construction at the same time setting a new record for the most space being developed at one time in the Chicago market’s history. Additionally, 21 projects totaling 4.3 million square feet were also delivered in Q2.

New Construction Starts

15 projects totaling 12.8 million square feet of construction started in Q2 which is a record for quarterly construction starts. Five of the buildings under construction are built-to-suit projects, three of which are for Amazon.com, the e-commerce giant. Each of the Amazon buildings are multi-story facilities totaling about 3.8 million square feet, and are not only the largest buildings under construction but the largest modern industrial buildings the market has historically seen developed.

Vacancies in Speculative Construction are down

12 new leases, totaling 2.6 million square feet, were completed during Q2 in speculative buildings delivered since 2013 pushing vacancies in speculative buildings down to 25.6 percent, the lowest it has been during the current cycle — a signal that new speculative construction is continuing to lease despite economic uncertainty.

Spec leasing does well in submarkets

According to the report, submarkets also play a role in speculative construction development and many spec projects in submarkets that have seen significant speculative development are better leased. Most notably, the I-55 Corridor and I-80 Joliet Corridor submarkets account for 32.8 million square feet of spec development together, nearly half of the speculative development since 2013 and are 80 percent and 78 percent leased, respectively. Even better, the submarket of Lake County is 87 percent leased, the Central DuPage submarket is 86 percent leased and the I-290 North submarket is 85 percent leased.