Marcus & Millichap

Chicago Industrial Market Report

Second Half 2018

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Chicago Logistics Industry Remains on Stable Footing; Investors Target Familiar Areas

O’Hare anchors Chicago industrial market. Steadily growing wages and accelerating household formation are enticing developers to expand Chicago’s 1 billion-plus square-foot inventory. The I-55 corridor near Joliet continues to generate builder interest as the area has received roughly 25 million square feet since the beginning of 2016. Communities around O’Hare International Airport also remain focal points for developers. Distributors seek space in this part of the metro due to its quick airport access as well as close proximity to some of Chicago’s most traveled thoroughfares; in addition, rents are relatively affordable as they nearly align with the market average. Vacancy around the airport consequently sits in the low-4 percent band, one of the lowest figures in the metro. Kenosha County should also continue to log tight vacancy through the remainder of the year as rents are significantly lower than some other northern sections of the metro. Though tenants sacrifice distance to the market’s most densely populated neighborhoods by setting up shop in Wisconsin, they make up for it with rental rates in the mid-$4 per square foot range, almost $7 lower than some parts of North Chicago.

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