Leasing activity continued to slow in the Chicago industrial market during the second quarter of the year, according to the latest research from JLL.
In its most recent Chicago industrial report, JLL reported that just 6 million square feet of industrial leases were closed during the third quarter of this year in the Chicago market. That’s down from 7.4 million square feet and 10.2 million square feet in the first two quarters of 2024.
JLL reported that the third-quarter leasing volume in the Chicago industrial market was the lowest quarterly volume recorded here since 2018.
Part of this lowered tenant demand? JLL cited limited big-box activity, as only one big-box lease was signed in the third quarter. As a comparison, in the second quarter the Chicago industrial market saw three 1-million-square-foot deals.
The largest lease signed in the third quarter was by RJW Logistics Group, which took 639,900 square feet from PSP Partners in the Interstate-80 corridor.
This doesn’t mean, though, that developers aren’t still delivering industrial space to the Chicago market. JLL reported that 5.3 million square feet of industrial space was delivered in the third quarter of this year, ahead of the 3.7 million square feet delivered in both the first and second quarters of 2024.
Logistics Property Company delivered the largest speculative industrial completion of the third quarter, delivering a 1.2-million-square-foot facility in the Chicago North submarket. This ranks as the largest speculative industrial project completed in the city of Chicago ever, contributing significantly to the gain in deliveries in the quarter.
Overall, the Chicago industrial market had seen more than 5.65 million square feet of net absorption during the first three quarters of 2024. More than 14.3 million square feet was under construction during the same period, while the sector’s total vacancy rate stood at 4.8% as of the end of the third quarter.
