Chicago Industrial Market Report

Tenants favor large-bay assets. Total square footage leased rose roughly 15 percent in 2025 after three consecutive years of deceleration from the 2021 peak, supported by big-box demand near Joliet, Bolingbrook, and Chicago O’Hare International Airport. Even so, first-half move-outs, particularly among small-bay users, contributed to higher local vacancy and softer asking rents. This mirrored the broader metro trend, where consecutive quarters of net space relinquishment through June 2025 — the first such stretch since 2009 — subdued year-end net absorption. Still, tenants appear willing to make meaningful commitments, with average lease size surpassing 40,000 square feet in the first quarter of 2026 for the first time in more than two years, while net absorption posted its strongest opening quarter since 2022. While broader economic uncertainty may weigh on 2026 demand, slower supply growth relative to 2020-2024 should limit vacancy growth, even as half the pipeline remained unclaimed as of April.