Chicago & Midwest + Greater Chicagoland + Industrial | April 12, 2023

Chicago Industrial Transaction Volume Strong in Q1, Yet Sublease Space Ticks Upward

The fundamentals of Chicago’s industrial market remained steady in the first quarter of 2023 as the overall vacancy rate remained well below historical averages, falling 40 basis points year over year to 4.7%, Savills reported. That being said, Savills noted that a greater number of new sublease offerings have come to market in recent months, including within popular submarkets such as O’Hare.

Available space was observed to remain on the market longer, including in completed new construction. Net absorption surged throughout 2021 and 2022 but appears to have returned to near historical averages. Landlords have responded to this softening by offering increased concessions, including tenant improvement allowances.

Meanwhile, deal volume remained healthy in Q1, led by Target Corporation’s 1.2-million-square-foot lease at Rock Creek Logistics Center in Joliet, IL. The still-elevated construction levels appear to have peaked, and development is expected to slow considerably in the near to medium term.

Pictured: Rock Creek Logistics Center.

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Savills Chicago

About Paul Bubny

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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