NAI Hiffman has released its Q2 2023 Industrial Market Report – Metropolitan Chicago, an in-depth look at statistics for the Chicago industrial real estate markets. The report’s insights show that Chicago’s industrial fundamentals remain strong despite moderation.

However, economic pressures are expected to have an impact as interest rate hikes and rising construction costs have slowed new groundbreakings and contributed to a pullback from the historic absorption levels of 2021 and 2022.

Chicago had 4.3 million square feet of positive net absorption in Q2 2023, for a total of 7.5 million square feet so far this year., while vacancy remains tight at 4.2% overall despite substantial new supply hitting the market. The Chicago area maintains a robust development pipeline, with 36.1 million square feet currently under construction, almost 80% of which is being built on a speculative basis. 13 Chicagoland submarkets have more than 1 million square feet of development underway.