Vacancy dipped below 5% for the first time to 4.37% and decreased 68 basis points quarter-over-quarter from the 5.05% rate reached at the end of 2021, based on the report. Vacancy also tightened 139 basis points year-over-year compared to the near-6% rate from Q1 2021.
The numbers are remarkable, and they seem to be improving, still, week after week.
Low vacancy rates are a result of the more than 10.4 million square feet of net absorption recorded from January to March of 2022. NAI Hiffman confirmed that to be the largest amount ever recorded in that time frame.
The I-55 Corridor accounted for just above 40% of Q1’s net absorption figure, with eight transactions of 200,000 square feet or larger taking occupancy. Numbers for Central DuPage came in at No. 2, the submarket seeing 1.2 million square feet of move-ins in Q1. In total, 18 submarkets had positive net absorption on Q1.
Leasing activity also remains strong.
Over 20 million square feet of deals were recorded in just the beginning of the year, and new leasing activity increased 18.5% year-over-year from the 17 million square feet of deals signed in Q1 2022. Six suburban markets tallied more than one million square feet of new leasing.
NAI Hiffman also found that there were six deals signed in Q1 for more than 500,000 square feet. Of the six, a leading national e-commerce user signed for two respective one-million-square-foot pre-leases — CenterPoint Intermodal Center in Joliet in the I-80/Joliet Corridor and Commerce 94 in Kenosha in Southeast Wisconsin. NFI Industries signed a 997,802-square-foot sublease in Bolingbrook, the largest in Q1. The largest direct lease on existing space was signed by SC Johnson for 809,496 square feet at LogiPark 57-80 on S. Cicero Avenue in Country Club Hills.
As for new development, it continues to be fueled by the insatiable demand for space in Chicagoland, despite the limited supply.
There is a record 30.5 million square feet of development currently in the pipeline. Build-to-suit developments account for approximately 40% of the total figure, and 10 of the 21 submarkets in Chicagoland have more than one million square feet of development underway.