Chicago Industrial Market Showed Resilience in 2024

February 13, 2025

Industrial Brokerage Chicago Development More In Focus Investment Market Updates Midwest

Here's a look at the market's performance, based on data from CommercialEdge.

In the past year, Chicago’s industrial market has undergone significant changes. During 2024, the city’s development pipeline shrunk by 5.6 million square feet, totaling 7.6 million square feet in December 2024. Additionally, the metro’s vacancy rate has risen by 570 basis points to 9.7 percent, placing it fifth among major U.S. markets.

The facility at 701 Central Ave. in University Park, Ill. — W. P. Carey inked a 1.6 million-square-foot industrial lease at 701 Central Ave. in University Park, Ill. The distribution center features 120 dock-high loading doors and three drive-in doors. Image courtesy of Cushman & Wakefield

This shift is primarily due to an oversupply from record-setting development activity in 2021 and 2022, which have surpassed tenant demand, according to CommericalEdge data.

Leveraging its strategic location and well-developed rail and airport infrastructure, Chicago’s industrial market continues to demonstrate resilience and flexibility. Even with the pipeline shrinking to half of the previous year’s volume, the metro area remains a key player in industrial development. The Windy City delivered almost 14.9 million square feet of logistics space last year, while the investment volume reached roughly $2.7 billion.

Sales volume increases

Last year, Chicago’s industrial investment volume totaled approximately $2.7 billion, surpassing the $2.2 billion recorded in 2023. Despite this increase, assets traded at an average of $92 per square foot, up slightly from $89 the previous year. A total of 242 properties—totaling approximately 32.6 million square feet—exchanged hands in the metro in 2024.

Only Kansas City ($42 per square foot) and Indianapolis ($73 per square foot) recorded lower numbers. Meanwhile, New Jersey ($213 per square foot), Dallas ($173 per square foot) and Phoenix ($162 per square foot) continued post high prices.

Aerial Image of the three-building portfolio in Elwood, Ill. — Stonepeak acquired the three-building portfolio in Elwood, Ill., at the largest inland port in North America. Image courtesy of Stonepeak

In one of the larger transactions of last year, Stonepeak purchased a three-building, 1.7 million-square-foot rail-served logistics portfolio for $125 million. The fully leased assets are part of CenterPoint Intermodal Center–Joliet/Elwood—the largest inland port in North America. The properties are in Elwood, Ill., at 26318-26634 S. Walton Drive, 21561 Mississippi Ave. and 26634 Mississippi Ave.

Industrial development still active

At the end of December, Chicago’s industrial sector had 7.6 million square feet under construction, according to CommercialEdge data. The pipeline represented 0.7 percent of total stock, below the 1.7 percent national average and other peer markets such as Phoenix (5.3 percent), Kansas City (3.9 percent) and Dallas (1.9 percent).

Rendering of Plainfield Business Center's first industrial building in Plainfield, Ill. — Part of Plainfield Business Center, the speculative warehouse was designed to have 40-foot clear heights and 80 dock doors expandable to 160. *Image courtesy of Trammell Crow Co.*

Near the end of last year, Trammell Crow Co. broke ground on the first building of Plainfield Business Center, an industrial campus to total more than 8 million square feet in Plainfield, Ill. Taking shape on approximately 52 acres at 26220 W. 143rd St., the property will feature 40-foot clear heights, 80 dock doors expandable to 160 and 211 trailer parking stalls.

One month prior, CyrusOne also commenced construction on its second data center campus in Aurora, Ill. The project comprises two buildings totaling 446,000 square feet and will deliver an initial IT capacity of 40 MW with scalable capacity to meet future growth needs. The development is taking shape at 2725 Bilter Road.

Deliveries slow down

Last year, The Windy City delivered 41 properties totaling almost 14.9 million square feet—accounting for 1.4 percent of the metro’s total inventory, slightly lower than the national average of 1.8 percent. This amount was notably less than the 29.4 million square feet completed in 2023.

Among its peer markets, only Phoenix (32.7 million square feet) and Dallas (29.1 million square feet) recorded more completed space, CommercialEdge data shows.

rendering of Park 94, Building IV — Highland Commerce Center of Somers Located features 40-foot clear heights, 165 truck trailer parking spots, 511 employee parking spaces and 109 dock doors. Image courtesy of HSA Commercial Real Estate

HSA Commercial Real Estate delivered Highland Commerce Center of Somers, one of the largest speculative industrial buildings in Wisconsin. Located at 2655 113th Ave., the 918,884-square-foot distribution facility is directly off Interstate 94 at the Burlington Road Interchange in Kenosha.

Bridge Industrial also completed the 669,914-square-foot Building 2 and the 707,953-square-foot Building 3 of Bridge Point Melrose Park, a cutting-edge industrial campus that will exceed 1.5 million square feet in the coveted O’Hare submarket in Melrose Park, Ill.

Vacancy rate higher than the national average

The facility at 9850 Mississippi St. in Merrillville, Ind. — The industrial building features 134 dock-high loading doors, four drive-in doors and 40-foot clear heights. *Image courtesy of Avison Young*

At the end of December, the metro’s vacancy rate clocked in at 9.7 percent —above the 8 percent national average—climbing 570 basis points year-over-year and being the fifth-highest rate across top U.S. markets. Among peer markets, Indianapolis (9.8 percent) and Dallas (9 percent) recorded similar numbers.

In one of the largest recent industrial deals in Greater Chicago, Crow Holdings has signed a full-building lease at 9850 Mississippi St. in Merrillville, Ind. The more than 1 million-square-foot industrial facility is part of the 195-acre Silos at Sanders Farm master plan.

W. P. Carey also inked a 1.6 million-square-foot industrial lease at 701 Central Ave. in University Park, Ill. A global tech and logistics company occupies the entire building, marking it as one of the largest deals in the market.