Chicago’s industrial market showed renewed strength in the third quarter of 2026, with leasing activity climbing to its highest level in four years, vacancy declining and tenant demand helping absorb millions of square feet of available space, according to the latest research from Transwestern.
Direct leasing activity totaled 17.3 million square feet during the quarter, a 30.1% increase from the same period a year earlier. Total leasing activity reached 18.5 million square feet, its highest quarterly level since the third quarter of 2022, according to Transwestern’s third-quarter Chicago industrial market report.
The improved leasing numbers helped push the market’s direct vacant available rate down 30 basis points during the quarter to 4.1%. Overall availability also edged lower, settling at 8.5%.
Net absorption totaled nearly 5.5 million square feet in the third quarter, reflecting continued demand for warehouse and distribution facilities. That property type accounted for 5.6 million square feet of positive absorption. Manufacturing properties, meanwhile, recorded negative absorption of 76,351 square feet.
The I-55/I-80 Southwest Corridors led the Chicago market in absorption, recording 2.2 million square feet during the quarter. The submarket also posted 7.4 million square feet of positive net absorption over the past year, more than any other area tracked in Transwestern’s report.
One of the quarter’s most significant leasing transactions came from Amazon, which signed a lease for 1.2 million square feet in a build-to-suit logistics facility at Venture Park 65 in Crown Point, Indiana. Venture One is developing the 138-acre site, with completion of the building scheduled for 2027.
Construction activity also picked up, with 23.3 million square feet of industrial space under construction across the Chicago market. That represents the highest construction total in three years, although it remains well below the 40.4 million-square-foot peak recorded in early 2023. About 42.7% of the space currently under construction has been preleased, suggesting that a substantial portion of the new supply already has tenants lined up.
Developers delivered 3.7 million square feet during the third quarter, the highest quarterly delivery total in three years. Among the largest completions was a 1.1 million-square-foot logistics facility at 21012 W. Mississippi St. in Elwood. Occupied by CJ Logistics, the building helped drive the strong absorption numbers in the I-55/I-80 Southwest Corridors.
Rents continued to move higher, too. Average net asking rents increased 4% year over year to $9.79 per square foot on a triple-net basis.
Rental rates varied considerably across the region. North Chicago recorded the market’s highest average asking rent at $13.19 per square foot, followed by West Suburban at $11.62 and the Northwest submarket at $11.47. Upper Northwest posted the lowest average asking rent at $5.76 per square foot.
Availability also differed by location. Kenosha County had the highest direct vacant available rate at 7.6%, while McHenry County recorded the lowest at 1.8%. West Cook posted the highest overall availability rate at 11.1%.
Sublease availability increased for the first time in three quarters, rising 5.8% to 12.1 million square feet.
