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Spec Deliveries Mean Vacancy Uptick for Chicago Industrial
A brisk pace of deliveries of speculative construction helped keep absorption down and precipitated a 10-basis point increase in the Chicago industrial market’s vacancy rate, NKF reported. The fourth quarter brought less than two million square feet of absorption, marking the lowest year-to-date absorption since 2014.
Seventeen of Q4’s new deliveries were spec, accounting for more than 3.4 million square feet of new, vacant industrial product. Nonetheless, NKF reported, rental rates continued to rise to a new record of $5.50 per square foot.
Chicago’s industrial market still has 54 projects, or more than 15.5 million square feet, under construction. Most of it is expected to deliver this year, and 87% is spec, according to NKF.
Nonetheless, NKF’s forecast calls for vacancies to decline this year, even as the sector faces headwinds generally. “Overall, the Chicago industrial market is positioned to handle a slowdown better than other markets,” according to NKF.
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