Year-End 2022 Industrial Market Report
NAI Hiffman is pleased to present the Year-End 2022 Industrial Market Report, an in-depth look at the industrial market statistics for the Chicago metropolitan office and industrial real estate markets.
Chicago’s Industrial Fundamentals Strong in 2022
Chicago’s industrial market exhibited banner performance in 2022, as elevated demand continues to drive increased occupancy and robust new development. The region saw 6.4 million square feet of positive net absorption during the fourth quarter, bringing year-to-date absorption to 38.3 million square feet— leading the nation over the past 12 months. Vacancy continues to tighten at 4.1% overall during the fourth quarter, down 110 basis points year-over-year, despite a 26.6 million square feet of new deliveries during 2022. Although leasing activity cooled over the second half of the year, Chicago remains uniquely positioned for expansive growth, as its centralized location and expansive transportation infrastructure continue to draw major industrial players to the region.
- Chicago registered 9.4 million square feet of new leasing activity during the fourth quarter, down 21% quarter-over-quarter and 60% year-over-year. Following a historic 2021 that saw a record high 82.3 million square feet of new leasing activity, velocity has moderated, with annual leasing activity measuring 57.6 million square feet through the end of 2022.
- Vacancy remains tight at 4.1%, the fourth consecutive quarter of sub- 5.0% overall vacancy. Five submarkets edged below 3.0 percent vacancy during the fourth quarter: I-57/Will Corridor (0.1%), Southwest Cook (1.1%), I-55 Corridor (2.1%), Central DuPage (2.3%), and Fox Valley (2.9%). Fifteen of twenty-one industrial submarkets saw vacancy tighten year-over-year, while all submarkets remain below 8.0% in overall vacancy.
- Over 26.6 million square feet of new space completed construction during 2022, including 16.0 million square feet during the second half of the year.