Lease transactions, primarily in the warehousing sector, accounted for more than 12 million sf of first half activity. Strong demand, which has gone hand-in-hand with the strong economy, has been given an added push in the Chicago area by the expansion of logistics companies and retail and E-commerce expansion, according to CB Richard Ellis.
The overall vacancy rate for the Chicago industrial market, encompassing a 949-million-sf property base, declined slightly in Q2 to 7% from 7.1%, according to the report. Breaking out larger properties (100,000 sf and greater), the vacancy rate decreased to 7.3% from 7.5%.
Year-to-date, there's been a moderate pickup in new development, which accelerated in 1995 and since has averaged 14.9 million sf of new starts annually. There was 8.1 million sf of construction starts during first half, compared to 7.9 million sf during the first six months of 1999.
At the close of the second quarter, the highest vacancy rates were found in north DuPage County (13.5%) and the far southwest suburbs (13.1%) areas with high levels of new construction. Vacancies were lowest in northeast Cook County (4.4%) and the near west suburbs (5%).
The report showed the majority of construction starts during first half of 2000 were in Will County (4.8 million sf) and DuPage County (3.5 million sf) followed by Cook County (1.8 million sf), Kane County (1.6 million sf) and Lake County (646,884 sf).
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