Industrial Market Absorbs 5.7 Million SF in Q2, Most Since 2008
Chicago's industrial market experienced increased leasing and sales activity during the second quarter, as net absorption totaled 5,688,263 SF between April and June, the highest quarterly tally since the market recovery began in mid-2010.
The overall vacancy rate improved by 18 basis points during the quarter, decreasing to 8.09%, a rate that suggests a healthy, active market and encourages confidence in the market for landlords, investors, and developers. This has been demonstrated by rental rate increases, elevated investment sale activity, and a significant uptick in development as more than 11.4 million SF is currently under construction and more than 4 million SF of new product was delivered during the first half of the year.
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Demand for Suburban Office Outpaces Downtown Once Again
Suburban Office Market Vacancy Rate: 19.07%
The suburban office market has now absorbed more vacant space than the downtown office market for seven of the past nine quarters. Net absorption totaled 760,833 SF between April and June in the suburban office market, the greatest quarterly tally in two years. As a result, the vacancy rate improved by 60 basis points during the second quarter to 19.07%, a rate 122 basis points below what was recorded a year ago, and nearly 4.6% below the 23.66% peak rate recorded in 2010.
Downtown Office Market Vacancy Rate: 12.25%
Net absorption was only slightly positive during the second quarter in the downtown office market, despite the overall vacancy rate improving by 24 basis points to 12.25% by the end of June. A total of 7,604 SF was absorbed, as significant leasing activity was offset by new vacancies, the demolition of the 124,125 SF building located at 200-212 N Michigan Ave, and the planned conversion of the 238,921 SF office building at 360 N Michigan Ave into a boutique hotel.
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For further information regarding the content of these market reviews, please contact:
Craig Hurvitz | Director of Research
630 693 0645
If you are interested in attending a custom market overview presentation, please contact:
John R Picchiotti | Chief Operating Officer, Brokerage
630 691 0608
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