Stable and steady Chicago-area industrial market

From “Stable and steady: That’s how NAI Hiffman describes Chicago-area industrial market” – RE Journals

Stable footing. That’s how NAI Hiffman describes the Chicago-area industrial market as of the end of the first quarter.

And the numbers from NAI Hiffman’s first quarter 2025 industrial market report for the Chicago metropolitan area back up this assertion.

According to NAI Hiffman’s report, the total industrial vacancy rate in the metro Chicago area stood at 5.9% as of the end of the first quarter. That is a small increase from a year ago, when the Chicago-area industrial market’s vacancy rate was 5.7%.

NAI Hiffman said that 81.2 million square feet of industrial space remained vacant in the Chicago-area market at the end of the first quarter.

Net absorption in this market hit 3.5 million square feet in the first quarter, a figure that NAI Hiffman said indicated stable market conditions.

Leasing activity in the local market remained strong, too, with NAI Hiffman reporting that total leasing activity in the Chicago area reached 8.6 million square feet in the first quarter. That represents a jump of 6.2% from the second half of 2024.

Not all submarkets performed equally well, though. The I-80/Joliet Corridor had the highest vacancy rate at 12.3% as of the end of the first quarter. And the Central DuPage submarket saw net absorption of negative 330,197 square feet.

The McHenry County submarket, though, boasted the lowest vacancy rate in the first quarter at 1.5%.

The Chicago-area market isn’t unusual when it comes to the amount of speculative industrial construction. Spec industrial building is slowing across the country. In Chicago, only 34.4% of the 11.6 million square feet of industrial space under construction is being built on a spec basis, NAI Hiffman reported.

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Dan Worden
Research Analyst
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About Hiffman National: 

Based in the Chicago area, with an additional five regional hubs and 30 satellite offices, Hiffman National provides superior property management, project services and accounting services to a diverse portfolio including office, medical office, retail and industrial properties nationally. The firm’s comprehensive property management platform and attentive approach to service contributes to client NOI and has helped the firm to more than double in size in five years. Hiffman National is an award-winning company with more than 250 employees strategically located throughout North America.

About NAI Hiffman:  

NAI Hiffman is one of the largest independent commercial real estate services firms in the US, with a primary focus on metropolitan Chicago, and part of the NAI Global network. We provide institutional and private leasing, property management, tenant representation, capital markets, project services, research, and marketing services for owners and occupiers of commercial real estate. To meet our clients’ growing needs outside of our exclusive NAI Hiffman territory, we launched Hiffman National, our dedicated property solutions division, which provides property management, project services, and property accounting services across the country. NAI Hiffman | Hiffman National is and award winning company headquartered in suburban Chicago, with more than 250 employees strategically located throughout North America.