The Chicago industrial market continues to benefit from its centralized location as well as its superior rail and highway access.
The tremendous growth in e-commerce sales witnessed since the start of the pandemic has driven demand from retailers seeking to shorten last-mile deliveries and get products in the hands of consumers faster and in a more cost-effective manner. Additionally, demand from logistics tenants to serve these last-mile deliveries have grown alongside e-commerce retailers, as same-day deliveries become more prevalent.
As a result of the changing e-commerce landscape, the Chicago industrial market witnessed exponential growth in well-located logistics spaces located along the outer rims of the Chicago market during the third quarter. Approximately 9.7 million square feet of leasing activity occurred last quarter, marking a nearly 17% increase over the previous quarter.
While Chicago’s industrial demand nearly doubled over the previous quarter, pushing industrial development to a 3-year high of 20.5 million square feet, sales continued to decline in the third quarter.
With uncertainty rising and financing becoming both scarcer and more expensive, sales volume totaled just under $300 million in the third quarter, the lowest quarterly volume recorded since 2013. Despite this decrease in valuation, Chicago’s geographic and infrastructure advantages should continue to make it a key player, as the nation reorients its logistical network to meet rising e-commerce demand.