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CHICAGO-Speculative building has nudged the vacancy rate with sublease space up to 9.8% across the 927-million-sf area industrial market, according to Delta Associates, the research arm of Transwestern Commercial Services. Meanwhile, the $172 million in property sales during the first quarter is down $201 million from the same period in 2005, according to the companies' research.

Nonetheless, a strengthening local economy will result in lower vacancy rates and higher rents, Delta Associates predicts, albeit modestly. After a 2.4% rise in 2005, rents took a slight dip in the first quarter to an average net rate of $4.98 per sf. "We expect industrial rents to rise gradually over the next two years, as demand remains strong," according to the Alexandria, VA-based appraisal and consulting firm.

One of the tightest submarkets is in the suburbs of western Cook County, where only 6.4% of the 82.7 million sf is available, either directly or via sublease. On the other hand, tenants may hold the best cards on the 53.7-million-sf southern portion of the I-55 Corridor. Vacancy with sublease space there is 17%.