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Market Report

Chicago Industrial

Second Half 2019

Rent Growth Headlines Healthy Chicago Industrial Market; Yield-Driven Buyers Finding Opportunities

Persistent space demand pushes rent growth to highest level this cycle. Chicago remains a key component to many supply-chain networks around the country, powering its status as one of the nation’s primary distribution hubs. This continues to fuel robust space demand, benefiting rent growth as the average asking rent is on pace to expand more than 15 percent in 2019, boosting NOIs and sparking an influx of speculative projects. About two-thirds of the new supply in 2019 was developed as speculative space, illustrating the growth potential builders see in Chicago’s industrial market. Western sections remain highly targeted by developers, including those within the Southwest I-55 corridor like Bolingbrook and Romeoville. Over the past year ended in October, this submarket recorded 4.1 million square feet of new supply, more than any other part of the metro. Regions farther north around the DuPage Airport as well as West Chicago and north Aurora also garnered significant interest. Relatively low vacancy in these areas has accentuated the need for more industrial space.

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