Industrial is riding the wave of prosperity into another year, and the strongest product type right now? Big box, or any warehouse or distribution center over 200,000 square feet, as businesses increase stock to keep up with consumer demand.
During 22Q3, Chicago’s big box vacancy rate increased for the second quarter in a row, climbing 65 basis points to 3.6%, but a closer look at the numbers signifies it’s not a bad thing. It’s because of the stream of new product being delivered, thanks to determined developers.
After bottoming at a record-low 2.6% during 22Q1, spec construction completions increased over the past six months, pushing the vacancy rate up, according to a new report by Colliers. Unprecedented demand for big box space since 20Q4 combined with record low vacancy resulted in the need for new speculative product and construction started on over 30 buildings of this size (15.5 million square feet) bringing the total under construction to 63 buildings or 31.5 million square feet, far exceeding past data.
Despite the tight market, leasing activity also picked up during 22Q3, totaling 6.3 million square feet among 22 new leases and lease expansions. This is a 24% increase compared to this time last year, based on the report, which bodes well for the record amount of big box space under construction, as many of the new leases were pre-leases in large, under construction spec buildings.
Some of the quarter’s largest big box lease transactions include:
- Uline: 1,048,961 square feet at 10322 140th Avenue in Bristol, Wisconsin
- Home Depot: 990,234 square feet at 3301 Brandon Road in Joliet, Illinois
- RJW Logistics Group: 814,848 square feet at 1701 W. Normantown Road in Romeoville, Illinois
- Ryder Logistics: 543,648 square feet at 310 Overland Drive in North Aurora, Illinois
- Vital Proteins: 491,089 square feet at 3400 N. Wolf Road in Franklin Park, Illinois
- DSV: 307,378 square feet at 1401 Devon Avenue in Bensenville, Illinois
- Vanguard Logistics: 287,051 at 537 Discovery Drive in West Chicago, Illinois
- Tailored Brands, Inc.: 282,616 at 2000 Deerpath Road in Aurora, Illinois
- Bombardier Recreational Products: 247,584 at 1445 International Drive in Mount Pleasant, Wisconsin
- La-Z-Boy, Inc.: 220,620 on Belle Lane in Bolingbrook, Illinois
