Industrial Vacancies Tick Down to 17-Year Low
Net absorption in Chicago’s industrial market has been positive for 26 consecutive quarters through Sep. 30, and is poised to make it 27 quarters in a row, according to VP Craig Hurvitz at Colliers International | Chicago. With leasing velocity up for the second quarter in a row, the sector posted its lowest vacancy since 2001, ticking down four basis points to end Q3 at 6.4%.
If vacancies reached a cyclical low during Q3, then development hit a couple of highs. Q3 saw 26 industrial projects totaling 7.2 million square feet get underway, the greatest new construction total since 2016. It also meant a 61.1% quarterly increase in the amount of square footage under construction.
The current development surge is expected to continue through year’s end before tapering in Q1 2019. It’s expected to be particularly prevalent in infill locations, with developers focusing on mid-sized speculative facilities, according to Hurvitz.
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