The Chicago industrial market saw improving fundamentals during the third quarter of 2025, with net absorption of nearly 7.5 million square feet and the sector’s vacancy rate falling to 6.1%.
That’s the positive news from NAI Hiffman‘s third quarter metropolitan Chicago industrial report.
As NAI Hiffman writes, the demand for industrial space in the Chicago market is down from where it was from 2021 through mid-2023. But the high demand during those years was an anomaly. NAI Hiffman says that demand in this sector is now at a more sustainable level.
Year-to-date absorption in the Chicago-area industrial sector totaled 10.8 million square feet as of the end of the third quarter. That’s an improvement over the 8 million square feet reported during the same period in 2024.
The vacancy rate in the Chicago-area industrial market fell 30 basis points on a quarter-over-quarter basis to 6.1%. NAI Hiffman said that this drop was fueled by several major tenant move-ins, including RJW Logistics’ occupancy of 1.1 million square feet at 201 W. Compass Blvd. in Joliet.
The Chicago industrial market recorded 9.7 million square feet of new leasing activity in the third quarter, down from 12.1 million square feet in the previous quarter. Year-to-date total new leasing volume stands at 32.7 million square feet.
NAI Hiffman reported that the I-80/Joliet Corridor led all submarkets during the third quarter, accounting for 1.6 millions square feet of new leasing activity. The largest industrial lease of the quarter, though, occurred in the South Cook submarket, where Peopleworks committed to 757,504 square feet at 21500 Gateway Drive in Matteson.
