After a record-breaking year of investment in Chicago’s office market in 2016, there was a 42% drop in 2017. However, industrial investment dollar volume rose 35% through the first three quarters of 2017. New construction has played a major role in the vacancy rate, which has mostly been in the I-55 and I-80 corridors.
Below is an article from rejournals.com that describes the climate of industrial real estate in the Chicagoland area over the last 2 years and what is anticipated for 2018. After reading the article, give us a call at Caton Commercial so we can meet with you to develop the commercial real estate strategy that is right for your business.
Source: rejournals.com | Re-Post Caton Commercial 2/8/2018
Compared with recent years, Chicago’s commercial real estate market registered decreased leasing activity throughout 2017. This trend was evident in the industrial sector, where much spec space remains unleased.
Notwithstanding an increase in new construction, Chicago’s industrial market recorded a 40-basis-point, year-over-year uptick in vacancy, reaching 6.5% in third-quarter 2017. During the first three quarters, 18.3 million square feet was delivered with an additional 12 million square feet under construction.
Most of this construction activity occurred in the I-55 and I-80 corridors, “negatively impacting submarket fundamentals,” per Avison Young’s 2017 Review and 2018 Forecast. A dearth of available, buildable properties in high-demand submarkets is driving developers to seek out in-fill opportunities.
Major industrial activity includes Brennan Investment Group’s plan to develop an 85-acre, tech/industrial business park within the O’Hare submarket. Elsewhere in the region, Bridge Development Partners announced the acquisition of a 54-acre site in Downers Grove, with plans to build three industrial distribution buildings totaling 680,420 square feet.
Major industry drivers continue to be e-commerce and food-related users. This trend is likely to increase due to Chicago’s centralized location and existing infrastructure.