The Chicago industrial market, which has run white-hot since the start of the pandemic nearly three years ago, exhibited signs of a slowdown at the close of 2022, Savills reported. While vacancy remains well below the long-term average, it has risen for two consecutive quarters, closing 2022 at 4.6%.
Demand appears to be cooling, though asking-rate growth has not yet abated, increasing 3.7% over the fourth quarter to $5.60 per square foot. Rates have risen steadily over the past two years due to strong occupier demand and upward pressure from inflation. However, Savills noted that Chicago remains a comparative value compared with U.S. coastal markets.
Downward pressure on rents and vacancies could arise from the massive influx of new deliveries. “While construction activity was impressive, it remained to be seen whether current levels of development were sustainable and if market dynamics may be fundamentally altered by potential overbuilding,” Savills reported.
For more insights into the industrial market, be sure to register for Connect Industrial Midwest 2023, scheduled for Feb. 22 at Joe’s Live in Rosemont, IL.
Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 13-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 15-20 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces.
Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and GlobeSt.com at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications.
Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).
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