CHICAGO—Strong demand from e-commerce and logistics users continues to drive the Chicago region's industrial market, which saw developers deliver 8.3 million square feet of new product in the third quarter, according to Avison Young research. That was the most seen in the Chicago area industrial market since 2008. Developers have delivered through the end of the quarter 18.3 million square feet.
The amount of new industrial product under construction has started to slow, however, dropping to 12 million square feet during the quarter, from a high of 21 million square feet at year-end 2016. And although the market in general retains a remarkable amount of strength, here and there a few strains have begun to show.
“I think some submarkets are going to be oversaturated with new space,” Greg Rogalla, senior research analyst with Avison Young's Chicago office, tells GlobeSt.com. Specifically, the popular I-80 and I-55 submarkets, where developers have launched a number of speculative projects, should see new supply outpace tenant demand, at least for a short time. The I-55 and I-80 corridors accounted for 75% of all new product in the Chicago market, according to Avison Young research.
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
