Smaller and mid-sized spaces are increasingly attracting the interest of industrial users, according to the latest research from Colliers.
According to Colliers’ 2025 first-quarter Chicago industrial market report, leases for Chicago-area industrial spaces under 80,000 square feet jumped 5.7% when compared to the fourth quarter of last year.
Colliers reported that these smaller and mid-sized industrial leases accounted for 2.7 million square feet across 94 transactions in the first quarter. In the last quarter of 2024, the Chicago-area industrial market saw 89 leases of under 80,000 square feet totaling 2.6 million square feet.
Industrial leasing activity slowed, though, in the first quarter in the Chicago market. Colliers reported that new industrial leasing activity for the first quarter reached 7.4 million square feet in the Chicago area, reflecting a 16.7% decrease from the 8.9 million square feet recorded during the same period the previous year.
In other key takeaways, Colliers reported that:
Build-to-suit projects made up 69% of the current Chicago-area industrial development pipeline in the first quarter of 2025, decreasing from 83% the previous quarter.
The slowdown in speculative construction deliveries will create an opportunity for the existing vacant space to be absorbed.
Industrial vacancy in the Chicago dropped 50 basis points on a year-over-year basis, falling to 4.79% as of the end of the first quarter.
