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Signs of Overbuilding Are on the Horizon
Across the major property types, Chicago’s current and forthcoming supply remains in sync with demand. However, experts told Crain’s Chicago Business that the risk of overbuilding is on the rise, depending in part on location.
One such location for apartments is the South Loop, where developers will complete 2,200 apartments in 2019 and 2020, on top of 650 delivered year to date. “That’s going to be a very competitive market for the next 12 to 18 months,” Integra Realty Resources’ Ron DeVries told Crain’s.
For industrial, where developers have added 24.8 million square feet of supply in the past year, vacancies are highest in the I-80 corridor. Seven spec warehouses exceeding 700,000 square feet are currently available.
“I don’t think it’s a complete overbuilding or a sign of impending doom, but it’s definitely a little eyebrow-raising,” said Steve Groetsema, partner of the Midwest region for Chicago-based Bridge Development Partners.
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