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Market Report

Chicago Industrial Market Report

Midyear 2023

Economic Pressures Mark a Turn from Historic Operations,
Though Major Hubs are Well-Positioned

Headwinds challenge record-tight conditions. During 2021 and 2022, tenants absorbed a combined 75? million square feet of industrial space on net, outpacing a robust completion total by 28 million square feet. This substantial leasing activity reduced metro vacancy to 3.9 percent entering 2023, its lowest point since before 2000. However, economic headwinds have since begun to curb these tight conditions. Tenant demand so far in 2023 has not kept pace with the last two years, as more circumspect consumers and additional lending pressures are temporarily taming industrial users’ expansion plans. This behavior is weighing on net absorption, which is projected to fall roughly 40 percent short of last year’s total. Still, vacancy in 2023 remains firmly below recordings prior to 2022. 

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