Q2 2024 Chicago Industrial Market Report

The Chicagoland industrial market hits the midway point of 2024 with several of the same trends that emerged in the first quarter: increased vacancy due to new deliveries, elevated rents from speculative construction, and low net absorption. On a more positive note, leasing volume was back to normal levels with 11.4 million square feet of transactions. Net absorption was down to 1.9 million square feet, down 80 percent from this time last year. Direct vacancy increased this quarter as more speculative buildings delivered to the market, sitting at 5.0 percent, with triple net rents increased to $8.22.

Notable users moving this quarter include Ecolab (677,000 square feet at 5460 Rock Run Dr) and Cy-press Medical Products (383,404 square feet at 21051 W Walter Strawn Dr). There are 62 buildings under construction, totaling in over 16.3 million square feet of new space, most of which is being built on spec. Anticipated new product, coupled with limited options, has pushed rents further into uncharted territory as triple net rents across all sizes and submarkets increased. Building sales for the quarter totaled $738 million in volume, with the average price per square foot decreasing to $86 per RSF. The average cap rate for these transactions ticked down 70 basis points to 7.0 percent.

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