The Chicago industrial market didn’t just set one record last year. No, it enjoyed record-breaking leasing volume, net absorption and investment activity in 2021.
According to Avison Young‘s fourth-quarter Industrial Insight report, the Chicago industrial market saw a 20-year historical high of 64 million square feet of space leased in 2021.
And that’s just one bit of good news from the report. Avison Young reported, too, that the Chicago industrial market saw 33 million square feet of absorption last year, surpassing the 20-year high set in 2006.
The overall vacancy rate for the Chicago industrial market fell to 5.4 percent last year, a decrease of 120 basis points when compared to year-end 2020. At the same time, asking rents increased by 10.6 percent in 2021 when compared to the end of 2019. Avison Young says that low vacancies have allowed landlords to push asking rates to new heights in this market.
And in a true sign of the strength of the Chicago industrial market, Avison Young says that industrial investment activity here surged to $8.1 billion in 2021. Investors are still attracted to the strong fundamentals of the industrial sector, especially since this market class has actually thrived during the COVID-19 pandemic.
This doesn’t mean that there aren’t challenges in the market. Avison Young says that developers are struggling to keep up with demand for new industrial space. The increase in lead times for precast and steel and the rise in construction costs are also challenges.
