Colliers International says there has been a massive increase in speculative industrial development in Chicagoland since 2013, with 73.6 million sq. ft. of deliveries.
The brokerage expects demand to be dampened during the COVID-19 pandemic, but the demand for “modern product” will increase again when the public health crisis is resolved.
Since 2016, “demand for modern industrial space has outpaced the rate of development for the past three years,” Colliers says in a research report for the first quarter of 2020.
Colliers says significant new leasing activity in modern spec product has pushed the Chicago-area vacancy rate in buildings built since 2013 down every quarter since the beginning of 2017. At the end of the quarter, the buildings had a 25.9% vacancy rate.
“Another 38 speculative projects totaling 9.3 million square feet are reportedly under construction,” Colliers reports. “Fallout from the ongoing coronavirus pandemic and the economic response may result in these buildings leasing more slowly than over recent years, but demand for modern product is expected to increase again once the situation improves.”