INDUSTRIAL SECTOR REMAINS STEADY 
The Chicago industrial market experienced an increase in vacancy rate for the second consecutive quarter due to the delivery of 28 speculative construction projects totaling 6.3 million square feet, of which 4.9 million square feet remains vacant. As a result, Chicago’s Metro Area vacancy rate increased by eighteen basis points to 3.68%.
Currently there are 77 speculative projects under construction totaling 28.6 million square feet, of which 23.6 million square feet are scheduled for completion in 2023. These new project deliveries will result in an additional increase in the vacancy rate in the second half of the year.
The Chicago area’s vacant supply increased in the second quarter to 51.2 million square feet, a 5.9% increase from the 48.3 million square feet posted in the previous quarter. Out of the 51 million square feet of existing supply currently vacant, 13.1 million square feet is first generation available space.
The Chicago Market’s transaction activity remained steady in the second quarter of 2023. New leasing demand totaled 8.1 million square feet, a 2.7% decrease from the 8.3 million square feet leased in the first quarter. Seven new leases greater than 300,000 square feet were signed during the second quarter, while six leases were signed in the previous quarter. The largest lease signed in the second quarter was done by Unilever leasing 1.1 million square feet at 2250 Berens Court in New Lenox.
User sale activity saw 34 transactions signed. The second quarter user sale volume of 1.5 million square feet represented a 5.1% decrease from the 1.6 million square feet recorded in the first quarter of 2023.
As a result, net absorption totaled 3.7 million square feet. Although positive, this marks a 33.6% decline from the first quarter mark of 5.6 million square feet.
In the second quarter developers completed 29 projects totaling 6.6 million square feet and started construction on another 15 buildings totaling 3.1 million square feet, bringing the total under construction to 33.4 million square feet across 88 buildings.
Demand is expected to remain elevated as the active construction projects are delivered over the next quarters.
