The raw numbers aren’t great, but the Chicago industrial sector remains a resilient one, according to the latest research from CBRE.
CBRE reported on Jan. 10 that the Chicago industrial market’s vacancy rate continued to rise as 2024 came to a close, increasing to 4.7% in the fourth quarter of 2024.
That’s a jump of 40 basis points from the 4.3% vacancy rate that the Chicago industrial market reported in the third quarter of 2024. It’s also up 60 basis points from 4.1% in the fourth quarter of 2023.
In another sign that the local market is struggling a bit, CBRE reported that total available sublease space also increased on a quarter-over-quarter basis, jumping from 12.45 million square feet in the third quarter of last year to 15.8 million square feet in the fourth.
Available sublease space in the Chicago industrial market in the fourth quarter of last year nearly doubled from the 7.8 million square feet on the market in the fourth quarter of 2023.
It’s little surprise, then, that quarterly net absorption fell here, too, dropping to 1.6 million square feet in the fourth quarter. As CBRE reports, that’s a significant decline from 3.5 million square feet of net absorption in the third quarter of 2024.
It’s a big drop, too, from the 7.8 million square feet of positive net absorption recorded in the Chicago industrial market in the fourth quarter of 2023.
In a sign, though, that developers still believe in the fundamentals of the Chicago industrial market, CBRE reported that construction activity in this sector totaled 12.7 million square feet in the fourth quarter of last. That’s a jump from 10.2 million square feet in the third quarter of 2024.
Construction deliveries in the Chicago industrial market reached 1.7 million square feet in the fourth quarter, also an increase from 1.4 million square feet in the third quarter of last year.
