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September 2020

Cold facts point to job growth in food storage

A 42,000-square-foot freezer building at 5115 S. Millard Ave. recently sold for $7.5 million.

It’s a trend that was going on before COVID-19 but got a substantial assist from it: Where we get our food is changing. It’s a change that has set up a flurry of activity in industrial real estate.

In the Chicago area, the cold-storage market totals 11.4 million square feet and just 2.5% of it was vacant in the second quarter of 2020, compared with 7% for the same period last year, according to data from CoStar Group provided by NAI Hiffman.

John Basile, senior vice president at NAI Hiffman said there’s a squeeze going on in the market; not only is the demand for temperature-controlled space rising, but the available space is sometimes declining because older buildings often are considered unsuitable. Tenants and investors want buildings with the best mechanics and layouts that allow for the greatest efficiency, he said. “This presents a development opportunity near the city center,” Basile said. “These companies want to be close to the population and to the worker base.” He said sites near the airports are popular, but there’s also major interest in property near the Stockyards Industrial Park in New City and the Chicago International Produce Market at 2404 S. Wolcott Ave.

Read the full story from the Chicago Sun-Times here. 

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