CHICAGO—The mood was upbeat yesterday in Chicago when Newmark Grubb Knight Frank welcomed hundreds of brokers from across the country to its annual Industrial Strength Connections Summit. A lunch panel of national players was in agreement that despite minor concerns the sector is not in danger of a slowdown or falling victim to overexuberance.

“There is some weakness in in China and some weakness in Texas,” said Jim Clewiow, chief investment officer of CenterPoint Properties. “But it seems like in general that the market is very strong.”

Don Schoenheider, the Chicago-based senior vice president of Hillwood Investment Properties, a Perot company, said the situation in Chicago was a microcosm of the nation. New construction has boomed, at least in comparison with the years following the financial crisis, but the number of projects started by developers remains modest considering the level of demand. And of the roughly 14 million square feet launched in the metro area this year, about one-half is pre-leased. “We are in no way shape or form overbuilt.”

And to those worried that this upswing has gone on for too long, Brian Dietz, vice president, asset management, for Industrial Property Trust, pointed out that the market still had some arrows left in its quiver. In Chicago, for example, much of the new construction and leasing activity over the past few years has come from the big users, “but when you look at the small guys, their confidence has returned in just the last six to nine months.” And careful developers can now turn their attention to this group, secure in the knowledge that the large projects completed in the past few years have secured enough tenants.

“There is more restraint now,” said Richard Strader, senior vice president, global customer solutions, for Prologis. “We're not quite as exuberant about new development.” He said that his company currently has about 445 million square feet and a vacancy rate of less than 5%, roughly the same rate it had in 2007. “There are several markets that have unprecedented levels of occupancy,” but the firm is picky about where it breaks ground. Prologis operates in 30 markets, and is building in 17, a list which, for example, does not include Atlanta. “Rents there still have a way to go.”

“It will be really interesting to see what happens when the Fed pops interest rates,” added Dietz. But even that possibility, spoken of by many at the conference, did not seem to cause much concern.

Clewiow of CenterPoint did not believe the expected interest rate boost would have much impact. As long as confidence in the overall economy remained high, the historically low cap rates among industrial properties should continue. “I think that's more risk driven than leverage, cost driven.”