Chicago’s Industrial Sales Lead the Midwest

Benefiting from its place, sturdy rail and airport programs, Chicago’s industrial market stays sturdy and adaptable. Regardless of a discount within the industrial pipeline to half of final yr’s quantity, the metro stays one of the vital energetic markets for industrial growth. As of the tip of August, town had 10.3 million sq. toes of business house beneath building.

Chicago’s industrial market continued to exhibit its energy this yr, main the Midwest with $1.9 billion in transactions in the course of the first eight months, and rating fourth nationally in gross sales quantity. Beneath, we’ve compiled CommercialEdge knowledge for a present overview of the Windy Metropolis’s industrial market efficiency.

Driving success in industrial gross sales

Chicago led the Midwest with industrial gross sales amounting to $1.9 billion in the course of the first eight months of this yr, rating fourth nationally, in line with CommercialEdge knowledge. A complete of 165 properties modified palms throughout the metro, totaling 20.8 million sq. toes. Property exchanged palms at a median of $98 per sq. foot, the very best within the area however nonetheless nicely beneath the nationwide common of $132.

Inland Empire ($263) and New Jersey ($230) have been the priciest metros, whereas Cleveland ($49) and Kansas Metropolis ($48) recorded the bottom common sale costs nationwide. 

Stonepeak bought a three-building, 1.7 million-square-foot rail-served logistics portfolio within the Chicago market from CenterPoint Properties. The New York-based firm paid $125 million for the totally leased portfolio. Located within the CenterPoint Intermodal Heart–Joliet/Elwood—the largest inland port in North America—the properties are in Elwood, Ailing., at 26318-26634 S. Walton Drive, 21561 Mississippi Ave. and 26634 Mississippi Ave.

Growth pipeline stays regular

On the finish of August, Chicago had 10.3 million sq. toes of business house beneath building throughout 31 initiatives. The pipeline accounted for 0.9 p.c of current inventory, beneath the nationwide common of 1.9 p.c. The Windy Metropolis ranked fifth nationally on a sq. footage foundation and second regionally after Kansas Metropolis, in line with CommercialEdge knowledge.

Within the first eight months of 2024, roughly 2.7 million sq. toes of business house broke floor in Chicago throughout 14 properties, representing 0.3 p.c of the entire inventory. The index was decrease than the nationwide common of 0.9 p.c.

In June, Dermody Properties broke floor on LogistiCenter at Nice Prairie, a 2.4 million-square-foot logistics park in Nice Prairie, Wis. As Wisconsin’s sole rail-served logistics park, the power will be capable to accommodate build-to-suit initiatives starting from 250,000 to 1.8 million sq. toes.

Uline Inc. additionally began on the enlargement its campus in Kenosha, Wis., with a 1.4 million-square-foot addition. The distribution middle positioned at 3002 128th Ave. will supply racking totaling roughly 882,900 sq. toes, in addition to 476 dock doorways and 41 bays.

Deliveries decelerate

Chicago’s industrial sector noticed 25 properties delivered year-to-date by August, totaling 9.4 million sq. toes. This represents 0.9 p.c of complete inventory, decrease than the 1.3 p.c nationwide determine. The metro’s industrial pipeline fell to almost half its year-ago quantity, when 17.2 million sq. toes of business house entered the market.

Amongst pers markets, Chicago surpassed Indianapolis (6.1 million sq. toes), Atlanta (5.8 million sq. toes) and New Jersey (5.8 million sq. toes). The Inland Empire (19.2 million sq. toes), Phoenix (20.2 million sq. toes) and Dallas (22.8 million sq. toes) recorded the very best variety of industrial deliveries.

Logistics Property Co. not too long ago accomplished Oak Forest Logistics Heart, a 664,453-square-foot industrial constructing positioned at 16799 Cicero Ave. in Oak Forest, Ailing. The power marked the developer’s eleventh venture in metro Chicago.

HSA Industrial Actual Property additionally delivered Highland Commerce Heart of Somers, one of many largest speculative industrial buildings in Wisconsin. Positioned at 2655 113th Ave., the 918,884-square-foot distribution facility is located straight off I-94 on the Burlington Highway Interchange in Kenosha.

Emptiness charges surpass nationwide common

Chicago’ industrial emptiness fee on the finish of August clocked in at 7.3 p.c, greater than the nationwide common of 6.7 p.c and the three.7 p.c fee registered in 2023’s identical month, as CommercialEdge knowledge reveals.

Different emptiness charges greater than the nationwide common have been reported in markets reminiscent of New Jersey (8.1), Dallas (7.7 p.c) and Inland Empire (6.9). Different markets recorded decrease emptiness charges, reminiscent of Atlanta (5.8). 

WestRock signed a build-to-suit with Dermody Properties at LogistiCenter at Nice Prairie in Nice Prairie, Wis. Upon the power’s anticipated supply subsequent yr, the corporate will lease greater than 580,000-square-foot.

Enterprise One Actual Property secured a 444,600-square-foot lease with John B. Sanfilippo & Son Inc. at Enterprise Park 47, an industrial constructing totaling 729,823 sq. toes in Huntley, Ailing. The deal is the most important industrial lease of the second quarter in Chicago’s North Kane County submarket, and the fourth largest within the Chicago metropolitan space.