Chicagoland Industrial Real Estate Report
The unemployment rate is down to 7.2%. There is slow growth in the metro area while there appears to be a huge boom in the City of Chicago.
Both local and state governments are burdened by debt and pension obligations from decade of mismanagement and facing tax increases and service cuts.
REIS predicts a modest employment increase this year and a greater increase next year.
The Industrial Real Estate Market
Consensus among researchers is that the industrial warehouse/disruption space is part of an ongoing positive trend of higher rents and less vacancy. The local Flex/R&D market remains weaker with smaller rent increases and increasing vacancy.
REIS reports a vacancy rate of 13.7% for Chicagoland’s warehouse/distribution space for the second quarter of 2014. For Flex/R&D space has increased to 17.6% up 20 basis points during the quarter.
Supply and Demand
Warehouse/distribution net absorption has been significantly positive, despite extensive vacancy the preference for modern space means new supply often drives absorption.
Flex/R&D net absorption was negative and has been slightly negative over the past 4 quarters. Demand has not turned around for this area’s older space and no new space has been recently completed or is under construction. REIS does predict a shift to positive absorption in the second half of 2014
Rent’s in Chicago’s warehouse/distribution with the average effective rent increasing to $4.02 per square foot which grew 3.6% year over year. REIS predicts gains to continue to increase.
Rent’s in Chicago’s Flex/R&D increased moderately .5% to an effective rent of $6.48 per square foot. Rent gains are expected to increase but not as much as the warehouse/distribution space.
REIS predicts that with the exception of warehouse/distribution rents, market fundamentals will be stronger in the second half of 2014 and the following years will see net absorption and rents continue to increase.
Want More Info
If you would like the full 12 page report for the Chicagoland Industrial Market please let me know and I will send it to you.
Additionally, we have reports for Apartments, Office and Retail if they would be of interest to you. I would be happy to send you the appropriate ones.
Data Provided by Reis, Inc. as reported August 27, 2014
Request your free Apartment, Retail, Industrial, Office Report for the Chicagoland area by filling out the form below.
This blog belongs to John Ziemba, A Licensed Real Estate Broker with KW Commercial, a Division of Keller Williams Team Realty. 847-217-0480//