CHICAGO— Despite a slowdown in investment activity, robust leasing activity, low vacancy rates and a healthy balance of supply and demand kept cap rates stable in Chicago-area industrial product over the first half of 2016—according to the latest research from CBRE Group, Inc. Cap rates for class A properties in the Chicago-area sit between 4.75% and 5.5%, down from 2015 and lower than the national average of 5.5%.
A main driver for this is Chicago's historically low vacancy rate—which sits at 3.75% for all class types, according to CBRE Research—and the emergence of new product in core markets that are attracting investors at high price points.
“We have seen what I call 'supercore' product emerge in the Chicago area, which I define as new class A product in infill markets such as I-55 and O'Hare,” says Michael Caprile, vice chairman for CBRE. “For product like this, in areas where available land is scarce, cap rates are sitting at sub 5.”
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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.
