CRE MARKETPLACE (pg.18): ARCHITECTS/DESIGN-BUILD FIRMS ASSET/PROPERTY MANAGEMENT FIRMS BROKERAGE FIRMS DEVELOPERS EDCs VOL.32 NO.2
THE LEADING NEWS SOURCE FOR INDUSTRIAL REAL ESTATE PROFESSIONALS & USERS
MARCH/APRIL 2022
No construction? No problem for I-88 Corridor amid robust leasing activity
By Peter Doughty, Senior Associate, Doughty Industrial Group, Marcus & Millichap
D
emand for industrial real estate climbed to new highs in 2021, with net absorption in the Chicago area shattering its previous record, even as developers added more inventory than ever to the market.
While newly developed buildings continue to command premium rents – the average asking rate rose to a 20year high of $6.35 per square foot in 2021, according to the Marcus & Millichap corporate research report – existing buildings are also bursting at the seams as users across industries look to expand their footprints amid
fierce competition for space. Investors are also outbidding each other, with some opting for deals outside of Cook County where the tax situation is more favorable. One geographic area of particular interest to investors is the I-88 Corridor, spanning from Chicago’s western suburbs of Lisle and Naperville through to the Aurora and North Aurora areas. Robust leasing activity coupled with limited new construction drove the vacancy rate down in 2021, with larger spaces in especially short supply. Long term, vacancy is expected to remain low I-88 (continued on page 12)
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Tenant interest in new-construction warehouse space soars, but availability might be scarce
By Mia Goulart, CIP Staff Writer
T
he imbalance between supply and demand in the national industrial sector is driving interest in new-construction facilities, which are in short supply, according to Newmark’s Industrial Insights Report. A survey of major industrial markets found that speculative construction deliveries fell significantly in 2021 because of COVID-19 labor disruptions, but demand did not fall, decreasing the length of time between warehouse delivery and stabilization. CONSTRUCTION (continued on page 8)