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Chicago Industrial Sees YTD Compression in Cap Rates
Although cap rates remained broadly stable across the Chicago region in the first half of 2019, Class A rates in industrial and neighborhood retail posted below the national average, signaling strong investor sentiment. That’s the top-line conclusion to be drawn from drilling down into CBRE’s latest North America Cap Rate Survey.
“Industrial activity in Chicago remains strong and investors recognize it as a very strong market,” said Ryan Bain, Chicago-based SVP of capital markets. “We have seen moderate compression year to date, and expect it to continue as the year progresses.”
Class A industrial cap rates in the region fell as low as 4.5% in H1 2019, compared to the national average of 5%. “We continue to see local, national and international investors making moves in the Chicago region,” Bain said.
For neighborhood retail, Chicago recorded Class A rates at 5.5%, similarly tighter than the national average of 6%.
Pictured: The True Value distribution facility in Harvard, IL, which traded in May.
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