Still, the region's massive inland ports, advanced railroads, roads and airport cargo facilities, coupled with its central location, should continue fueling a high level of leasing activity. “Chicago has state-of-the-art, super-regional infrastructure that gives us an advantage,” Williams adds. “I don't anticipate the floor falling out from under us.”

The largest construction recent project to deliver was Venture One's one million square feet build-to-suit for Georgia-Pacific located at the Gateway 57 Corporate Park in suburban University Park. And the largest project to have broken ground during the second quarter was the Opus Group's 1.2 million square foot speculative Rock Creek Logistics Center within the I-80 Corridor.

Notable Q2 lease transactions included:

• Clearwater Paper signed for 624,370 square feet at the CenterPoint Intermodal Center within the I-80 Corridor.
• Amazon leased 438,150 square feet at the Crest Hill Industrial Park, also within the I-80 Corridor.
• Expeditors International leased 310,458 square feet at the newly completed 3400 Wolf Rd. facility in the O'Hare submarket.

The recent triple net lease sale of the Georgia-Pacific's new facility was just the latest sign that investors have a big appetite for Chicago-area Industrial product. In the second quarter, transactional volume totaled $409 million, with an average price of $64 per square foot. The average cap rate rose slightly to 7.1%. The largest sale transaction during the second quarter was TA Realty's $55 million purchase of 1500 Remington Blvd., Bolingbrook, IL, a 615,000 square foot class A distribution facility recently developed by Northern Builders.

That $90 per square foot price may be one of the signs that the market is eventually headed for a change, Williams says. “Do the math.” At that price, “you've got to get pretty good rental rates.” But based on conversations with developers, he also believes there is still room to run. “The window of opportunity to make deals is in the next 24 months.”

Among the other findings in the report are:

• Vacancy dropped significantly in key areas– The submarkets which have seen the most significant reduction in vacancy were South Cook, O'Hare and Lake County—dropping by 340, 70, and 70 bps respectively. This trend can be attributed to increased leasing activity within those submarkets.
• I-55 Corridor vacancy up – The I-55 Corridor submarket saw vacancy jump 430 bps during the second quarter. This was partially due to increased construction activity over the last year, with developers adding about 4.8 million square feet. Both the I-90 East and I-90 West Corridors saw moderate increases in vacancy during the second quarter.

CHICAGO—Chicago's industrial market continued its record-breaking growth across all fundamentals during the second quarter, with absorption increasing to 6.2 million square feet, up 201% from the previous quarter and about 100% from last year's second quarter, according to Avison Young research.

The overall vacancy rate sank to 6.1%, a decline of 10 bps. Submarkets that absorbed the most space during the second quarter were the I-80 Corridor, I-55 Corridor, and Lake County, representing a combined 3.3 million square feet.

The region's construction boom also continues, Avison Young finds. Developers delivered another 5.4 million square feet in the second quarter, and have an additional 16.1 million square feet under construction. Just over half of those projects are build-to-suit.

“Everyone, particularly in the industrial sector, has seen very strong growth over the last six or seven years,” Hugh Williams, principal with Avison Young, tells GlobeSt.com. “I feel safe in saying if we're not at the high-water mark, we're close to it.”

Still, the region's massive inland ports, advanced railroads, roads and airport cargo facilities, coupled with its central location, should continue fueling a high level of leasing activity. “Chicago has state-of-the-art, super-regional infrastructure that gives us an advantage,” Williams adds. “I don't anticipate the floor falling out from under us.”

The largest construction recent project to deliver was Venture One's one million square feet build-to-suit for Georgia-Pacific located at the Gateway 57 Corporate Park in suburban University Park. And the largest project to have broken ground during the second quarter was the Opus Group's 1.2 million square foot speculative Rock Creek Logistics Center within the I-80 Corridor.

Notable Q2 lease transactions included:

• Clearwater Paper signed for 624,370 square feet at the CenterPoint Intermodal Center within the I-80 Corridor.
• Amazon leased 438,150 square feet at the Crest Hill Industrial Park, also within the I-80 Corridor.
• Expeditors International leased 310,458 square feet at the newly completed 3400 Wolf Rd. facility in the O'Hare submarket.

The recent triple net lease sale of the Georgia-Pacific's new facility was just the latest sign that investors have a big appetite for Chicago-area Industrial product. In the second quarter, transactional volume totaled $409 million, with an average price of $64 per square foot. The average cap rate rose slightly to 7.1%. The largest sale transaction during the second quarter was TA Realty's $55 million purchase of 1500 Remington Blvd., Bolingbrook, IL, a 615,000 square foot class A distribution facility recently developed by Northern Builders.

That $90 per square foot price may be one of the signs that the market is eventually headed for a change, Williams says. “Do the math.” At that price, “you've got to get pretty good rental rates.” But based on conversations with developers, he also believes there is still room to run. “The window of opportunity to make deals is in the next 24 months.”

Among the other findings in the report are:

• Vacancy dropped significantly in key areas– The submarkets which have seen the most significant reduction in vacancy were South Cook, O'Hare and Lake County—dropping by 340, 70, and 70 bps respectively. This trend can be attributed to increased leasing activity within those submarkets.
• I-55 Corridor vacancy up – The I-55 Corridor submarket saw vacancy jump 430 bps during the second quarter. This was partially due to increased construction activity over the last year, with developers adding about 4.8 million square feet. Both the I-90 East and I-90 West Corridors saw moderate increases in vacancy during the second quarter.