"I think there's been more deal flow," says Jason West with the company. "There seems to be more users out there shopping for space and looking at buildings."
Vacancy rose 0.2% since Q4 2009 to 11.6% of the 1.1 billion square feet in the Chicagoland market. However, There were no new construction deliveries in the first quarter, a state never recorded in Chicago by Cushman & Wakefield.
Tenants that can move or buy are happy, such as the purchase of a 500,000-square-foot manufacturing facility by Dennis Wholesale Foods in the city. Also, the direct net asking rate for warehouse-distribution facilities reached the lowest rate ever recorded, at $4.10 per square foot in Q1 2010, and landlords continue to offer lease incentives to fill space. The company reports the 10-year average for this space is $4.36 per square foot.
If anything, limited new construction will help market fundamentals return, West says. "We do believe with the minimal new construction through the remainder of this year, we should see positive net absorption in 2011," he says. "We think 2010 will be the year of stabilization, and beyond is the return to growth."
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