Chicago has weathered its share of storms, flurries of economic fluctuations, and global uncertainties. Its industrial real estate market has demonstrated remarkable resilience in the face of those challenges, faring better than many other markets.
“I’m a developer at heart, so I always see the glass half full,” said Susan Bergdoll, Senior Vice President & Partner for CRG’s Midwest region. “I choose to see the good. I see a lot of promise for the second half of 2024. I see even more promise for the first half of 2025.”
Susan Bergdoll, Senior Vice President & Partner for CRG’s Midwest region
She said she often finds herself reminding others that while 2024’s metrics may differ from those in 2021, they’re comparable to results in 2018 and 2019.
“No one complained about where the market was then,” Bergdoll said. “The market is still good.”
Vacancies remain relatively stable, especially in buildings 300,000 square feet and less, a segment of the market experiencing a shortage.
“If you can find a site and put up a 250,000- to 300,000-square-foot building, you’re going to lease it quickly because there just aren’t a lot of opportunities like that, and many companies want newer modern real estate,” Bergdoll explained.
While the market may have experienced a slowdown in activity, recent happenings indicate a resurgence of interest and activity. Factors such as stabilizing interest rates and the gradual shift from stockpiling to just-in-time inventory management contribute to this positive outlook.
“There are a lot of people who were pencils down, so to speak, and they’ve picked them back up in the past 90 days,” said Bergdoll. “It’ll take a little bit of time for everybody to get going again, but that’s why I’m hopeful for the second half of this year and the first part of the next.”
CRG’s commitment to both speculative and build-to-suit projects reflects a versatile approach tailored to market demands. The company’s latest venture, the Cubes at ORD, marks a significant addition to Chicago’s industrial landscape. Spanning 66,552 square feet on a 4.27-acre site in Franklin Park, this speculative project exemplifies the city’s appeal to developers seeking prime locations. Situated southeast of O’Hare International Airport, the Cubes at ORD offer unparalleled transit infrastructure, including direct access to Interstate 294, catering to the needs of small and mid-size users in search of Class A space.
The project is scheduled for completion in the fourth quarter of 2024, and boasts modern amenities such as ESFR sprinkler systems, high-efficiency LED lighting, ample dock doors and storage spaces, and parking for both cars and trucks. With CRG’s parent company, Clayco, leading the construction and CRG affiliate Lamar Johnson Collaborative serving as the architect, the Cubes at ORD promise to deliver top-tier facilities sought after by leading companies.
“What’s great about this project is that we will start construction in June of this year, and finish by the end of the year,” Bergdoll said. “We’ll be in a great position to take advantage of all this activity that’s going to start again in the coming months.”
CRG gravitated toward that site, despite turmoil in the interest rate and investment markets, because of its size and A+ location.
“We are focused on locations similar to Cubes at ORD, and we’re definitely giving anything that is suitable for a 50,000- to 300,000-square-foot building a harder look,” said Bergdoll, pointing out that the O’Hare submarket has maintained a vacancy rate of around 2 percent, showcasing consistent demand and limited land availability. “We know that’s what’s needed in the market right now, so we’re looking for those opportunities.”
CRG’s Cubes at ORD development illustrates Chicago’s enduring appeal as a hub for industrial development. Against the backdrop of a dynamic market landscape characterized by resilience, demand, and strategic investments, the project exemplifies the city’s ability to adapt and thrive amidst changing economic conditions.
