A total of 259 million square feet. That’s how much spec bulk distribution space was bult during the last six years in major Midwest markets. And companies didn’t hesitate to fill that space, with 86.8% of this spec construction occupied as of the third quarter of 2022.
That’s one of the highlights of the Midwest Speculative Construction Report released in December of this year by Cushman & Wakefield.
What’s interesting is that spec industrial development has been strong throughout the Midwest, not just in a few select markets.
An example? Chicago saw 87 million square feet of spec industrial space built from 2016 to the third quarter of 2022. A total of 89.2% of this space is occupied, with nearly half of it built since 2020.
And in Cincinnati, which has historically been a conservative speculative development market, nearly 26 million square feet of spec industrial space has been built across the region between 2016 and 2022. Companies have flocked to this space, with Cushman & Wakefield reporting that this new industrial product is 95% occupied.
This spec space comes out to 64 completed buildings from 27 developers, Cushman & Wakefield reported. These buildings, with an average size of 390,240 square feet, is home to 99 tenants.
Columbus is also enjoying a boom in spec industrial construction, with 77 buildings totaling 32.9 million square feet delivered since 2016. In Indianapolis, those figures are 77 buildings totaling 43.7 million square feet. These buildings have provided a home to 72 current tenants in the Indianapolis market.
Cushman & Wakefield reported that Kansas City’s speculative industrial boom might havce peaked in 2022, with an average of 8.6 million square feet of speculative industrial space under construction at the end of each of the first three quarters of the year. Overall, 30.5 million square feet of bulk distribution space has been delivered to the Kansas City market since 2016, resulting in 67 spec buildings that are now home to 126 tenants.
Developers have brought more than 24 million square feet of speculative bulk distribution space to the Louisville market since 2016. Despite the addition of this new space, the occupancy rate of speculative bulk product remains at a high 88.2% here.
And in St. Louis? Cushman & Wakefield reports that this market’s industrial sector has seen record development during the last few years. Since the first quarter of 2016, developers have delivered 15.5 million square feet of speculative bulk space in the St. Louis metropolitan area, with a strong 90.3% of that space occupied. Of that vacant space, 94.7% is in buldings delivered in 2022, spaces that are still in lease-up mode.
