First Quarter 2017 Industrial Market Review
NAI Hiffman is pleased to present its First Quarter 2017 Market Review, a detailed look at the market statistics for the Chicago metropolitan industrial real estate market.
Industrial: Strong Absorption Continues to Tighten Vacancy Rates
The vacancy rate for the Chicago industrial market measured 6.25 percent at the close of the first quarter of 2017, 95 basis points lower than the recorded rate at the beginning of 2016. Since reaching its peak of 12.10% at the height of the recession during second quarter of 2010, the vacancy rate has continually dropped, declining 585 basis points over the seven-year span.
For the third consecutive quarter, the industrial market absorbed more than 5.5 million square feet. Seven large corporate tenants including LASCO Fittings, thyssenkrupp, and Nealey Foods, each took occupancy of more than 100,000 square feet during the first quarter, contributing to over 1.1 million square feet of positive absorption alone.
Nearly 1.1 million square feet of new construction broke ground during the first quarter, including Venture One’s 276,000-square-foot build-to-suit for WeatherTech, Inc. in St Charles and ML Realty’s 181,011-square-foot speculative facility located in Lockport. Of the just under 17.0 million square feet of construction underway, 45 percent is being built on a speculative basis. If this speculative product is delivered vacant, a jump in the vacancy rate could be experienced in the coming quarters.