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CHICAGO-According to a report released this week by Insignia/ESG’s Industrial Services Group, the effect of the slowdown on the metro Chicago industrial market is moving along two separate channels. Industrial leasing is down, but industrial property sales are up.

According to the company’s figures, the Chicago industrial market, marking a shift from leasing activity to sales, remains relatively steady. Leasing across the market was 15 million sf in the third quarter of 2001, representing a 21% decline compared with the same quarter a year ago. Sales activity registered a 52.3% increase to 15.3 million sf in 3Q ’01, as compared with 3Q ’00.

Insignia/ESG pegs the industrial market’s availability rate at 8.1%, up from 6.2% a year ago and attributes the difference to a large influx of sublease space. It attributes the leasing decline not only to the overall economic slowdown but also to low interest rates.

“Today, it can be as cost-effective to purchase a building as it is to lease one,” says Jim Swartchild, executive director of Insignia/ESG’s Midwest Industrial Services Group. “Low interest rates have no doubt provided users with options other than leasing.”

Timed as if to illustrate the increased industrial sales trend, a number of sales have been announced in various parts of the market recently. San Francisco-based AMB Property Corp. has bought the Chicago Ridge Freight Terminal, a 59,600-sf cross-dock air-freight terminal in the O’Hare market for $7.3 million. Snap-Edge Corp., a maker of plastic molded edge restraints for concrete pavers, has also made an industrial purchase, buying a 60,000-sf industrial facility in west suburban St. Charles, IL.

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