Developers are still building industrial properties in the Chicago market. But they’re not building nearly as many new warehouses, distribution centers and factories as they were during the height of the COVID-19 pandemic, when industrial construction here and across the country soared.
According to the mid-year industrial development report released this week by CommercialSearch, Chicago’s industrial pipeline as of the middle of the year totaled 10.3 million square feet of space.
That is down from the 13.2 million square feet of industrial space that was under construction as of January of 2024. The reason for the slowdown in new industrial construction can be largely attributed to higher interest rates. These higher rates make construction lending less affordable. High construction and labor costs have had an impact, too.
There were still some sizable industrial projects delivered in the Chicago market this year. CommercialSearch pointed to the Bridge Point Melrose Park – Building 1,2 and 3. This project delivered in the first half of 2024 in the Chicago suburb of Melrose Park and brought 1.6 million square feet of new industrial space to the local market.
What’s happening nationally? CommercialSearch reported that at the close of the first half of 2024, the United States had 375.7 million square feet of industrial space under construction. That’s a lot of space, but this figure has dropped by almost 19% compared to the start of the year, when the United States had 463 million square feet of industrial space under construction.
The amount of industrial space under construction in the United States has dropped by 45% when compared to January of 2023, according to CommercialSearch.
Topping the list of most new industrial supply nationally was Phoenix, with 39 million square feet of industrial space under construction as of the end of the first half of the year. The Savannah, Georgia, market is set to register the largest industrial expansion, with a projected increase of 18.8% of new industrial space compared to the current inventory once completed, according to CommercialSearch.
