From speculative to secured: the rise of build-to-suit projects in Chicago's industrial sector

Chart shows a comparison of build-to-suit and speculative industrial developments under construction in the Chicago industrial market
  • Over the past year, the proportion of the Chicago industrial development pipeline dedicated to build-to-suit projects increased significantly, rising from 30% to 65%. With overall vacancy remaining low at 5.6%, companies with specialized requirements or the desire to own their facilities are electing to go the build-to-suit approach. Of the 26 build-to-suit projects currently underway, 17 are owner-occupied build-to-suit.
     
  • Speculative construction activity continues to decrease as securing construction financing continues to be a challenge with the current economic environment. Despite the decline, developers such as Bridge Industrial, Sterling Bay, The Missner Group, Seefried Industrial Properties, and CRG have recently broken ground on various smaller infill speculative projects throughout Chicago.  
     
  • The largest build-to-suit projects currently being developed are for companies such as Walmart, ULINE, Haier/GE Appliance and CJ Logistics all of which exceed over 1 msf.

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