Chicago’s industrial supply vs. demand, a tricky balancing act

- Despite a very active development pipeline, the Chicago industrial sector continues to experience positive net absorption, signifying robust demand that is not being overshadowed by new deliveries. A total of 20.5 msf of positive net absorption was recorded at the end of 2023 even with record-breaking new inventory of 35 msf over the same time frame.  

- From 2016 to 2020, average annual new deliveries in the Chicago industrial market were 19.8 msf. In 2023, new development surpassed this average by 76%, with 35 msf of new inventory, indicating a notable increase in construction activity.  

- Vacancy increased 110 basis points (bps) from 2022 to 2023, recorded at 5.3% due to the influx of new development within the market. However, anticipate vacancy to decrease throughout 2024 due to a reduction  in new developments breaking ground.  When compared to other major markets like Inland Empire, Dallas, Atlanta etc. Chicago’s vacancy remains the lowest, highlighting the resilience of the market.