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Chicago’s Industrial Sector Looks Stable Through Year-End
With market fundamentals having held up well during the pandemic and resulting downturn, the Chicago region’s industrial sector is expected to remain stable for the balance of the year. However, sales transaction velocity is expected to remain lower while the pandemic is still at large, says Integra Realty Resources.
IRR’s Industrial Market Overview predicts vacancy increases of between one and 100 basis points on a year-over-year basis for Chicago industrial. Effective rent revenues are expected to decline between 9.9% and 12% Y-O-Y for warehouse/distribution properties, and between 8.2% and 10.2% for flex/R&D properties.
“Distribution networks were already realigning to adapt to online and multichannel trends,” according to IRR’s report. “COVID-19 has brought an immediacy to this long-term trend.”
IRR notes that Chicago’s central location—for instance, it’s the nation’s only metropolitan market served by six Class-1 railroads—“minimizes risk in the logistics/distribution market.” Newer product has an edge, though.
Pictured: NorthPoint Chicago.
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