Chicago Industrials See Lowest Availability Rate in 20 Years

Ridge Brewster Creek, a 271,200-square-foot, 14-acre, speculative industrial development within Brewster Creek Business Park in Bartlett. It is already half pre-leased.

CHICAGO—The Chicago industrial market has set several historic records this year. In the second quarter, for example, tenants were responsible for 6.3 million square feet of positive absorption, driving an already historically low availability rate down to just 6.3%, according to a new report from CBRE . The last time the market availability rate was at this level was the first quarter of 1996, when the inventory totaled only 845 million square feet, or about 69% of today’s size. CBRE also found that tenant demand has pushed new construction to a historic high. Through the first half of 2016, developers began construction on 8.6 million square feet of space, the most for the first six months of a year since the company began tracking these statistics. “The market is showing no signs of slowing down,” Traci Buckingham Payette , senior vice president with CBRE, tells GlobeSt.com. “Even with an uptick in new construction, there is still not enough supply to meet the current demand. With an abundance of users still actively looking, we should see strong activity for the foreseeable future.” CBRE research shows that the Chicago market currently has five existing class A buildings with at least 500,000 square feet available for a cumulative total of 3.2 million square feet. And ten tenants currently need space in this size range with a total need of nearly 8.0 million square feet, more than twice the available supply. Other highlights of the report include:

• User sales through the second quarter totaled 6.5 million square feet, up nearly 6% from a year ago.
• The e-commerce sector accounted for 25%, or 1.5 million square feet, of the top 25 transactions in the second quarter.
• The Far Southwest Suburbs saw the greatest share of the top 25 transactions, as 36%, or 2.2 million square feet, of deals were completed there.