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9450 W. Bryn Mawr Avenue, Suite 550 | Rosemont, IL 60018 | 773-355-3000 | www.lee-associates.com
SECOND QUARTER 2019
11201 Enterprise Way, Sturtevant: 438,309 SF Available For Lease
FEATURED PROPERTY OF THE QUARTER
SECOND QUARTER OVERVIEWThe vacancy rate for Chicago’s industrial market increased by 6 basis points during the second quarter of 2019 to 5.78 percent. Despite this increase, net absorption was positive for the 14th consecutive quarter, totaling 5.2 million square feet during the second quarter of 2019, bringing the year-to-date tally to 9.5 million square feet. Nearly 1.2 million square feet of build-to-suit construction projects were completed in the second quarter, contributing strongly to the positive net absorption recorded during the quarter.
Although the vacancy rate increased, the current rate remains 35 basis points below the rate recorded one year ago during the second quarter of 2018. The main contributors to the vacancy rate increase included vacant speculative construction completions and Sears moving out of its 1.4 million-square-foot facility in suburban Manteno.
Available vacant industrial supply in the Metropolitan Chicago Area totaled 75.1 million square feet, over 600,000 square feet higher than the 74.4 million square feet vacant in the first quarter. The I-55 Corridor and Chicago South submarkets witnessed the largest decreases in vacant supply, while the I-80 / Joliet Area and I-57 Corridor experienced significant increases.
Construction completions totaled 6.2 million square feet among 22 projects during the second quarter of 2019. The largest completion was an 827,000 square-foot speculative facility in Elwood. During the current cycle, speculative development has accounted for 80 percent of the construction activity.
2Q Highlights• Overall vacancy rate reported
at 5.78%
• Net absorption remains positive at 5.2 million square feet.
• Development boom continues in I-80 and I-55 Corridors.
• Construction pipeline drops, but not as much as anticipated. There are 18.1 million square feet currently under construction.
CHICAGOLAND INDUSTRIALMARKET SNAPSHOT
New Spec Deliveries Push Vacancy Rate Higher
Owned by
SECOND QUARTER 2019
9450 W. Bryn Mawr Avenue, Suite 550 | Rosemont, IL 60018 | 773-355-3000 | www.lee-associates.com2
CHICAGOLAND INDUSTRIALMARKET STATISTICS
STATISTICAL HIGHLIGHTS » The second quarter vacancy rate of 5.78 percent is 6 basis points higher than Q1 2019.
» Net absorption was positive despite the increase in vacancy, totaling 5.2 million square feet.
» A total of 16 speculative construction projects were delivered during the second quarter of 2019, totaling 4.9 million square feet.
» Leasing activity in the small to midsized segment remains active; the only overhang is for properties 700,000 square feet and up.
» We continue to see existing occupiers expand within the market and take second, or third spaces around town to grow their businesses.
Submarket Industrial Base
Available Inventory Vacancy YTD New SF
Delivered Under
Construction 2q19 Net
Absorption YTD Net
Absorption
Central DuPage 22,839,985 1,098,240 4.81% 354,923 387,513 128,626 (30,707)
Chicago North 71,338,898 3,840,837 5.38% - - 210,174 392,711
Chicago South 112,854,833 4,415,636 3.91% 174,536 1,867,979 743,027 1,638,482
Fox Valley 38,080,326 1,808,050 4.75% 367,692 1,121,701 383,073 575,927
I-39 Corridor 30,471,093 1,441,607 4.73% 183,000 - 83,300 266,300
I-55 Corridor 98,908,757 8,185,846 8.28% 808,627 4,038,258 1,112,363 2,209,665
I-57 Corridor 32,806,486 2,019,343 6.16% - 1,099,480 (1,438,937) (1,480,487)
I-88 Corridor 65,778,136 3,415,564 5.19% 488,545 1,266,591 423,631 294,679
Joliet/I-80 Corridor 93,695,950 11,263,755 12.02% 2,463,425 1,155,903 418,275 1,716,731
Lake County 78,984,648 5,142,913 6.51% 1,187,327 313,227 1,089,922 631,846
McHenry County 28,713,367 764,784 2.66% - - 197,815 134,700
North Cook 37,336,651 1,622,028 4.34% - 140,316 122,078 323,680
North DuPage 64,610,871 3,008,411 4.66% 300,000 31,533 (245,591) 623,228
North Kane 36,439,859 1,242,911 3.41% 90,000 1,189,500 263,576 321,133
Northwest Cook 46,258,609 2,963,824 6.41% 619,950 162,875 218,623 (239,685)
Northwest Indiana 46,622,177 1,268,012 2.72% - - 333,859 523,818
O'Hare 100,304,666 4,661,836 4.65% 623,249 906,496 116,414 1,036,349
Rockford Area 48,860,257 2,624,787 5.37% 675,270 - 752,272 201,962
South Cook 84,809,013 4,278,662 5.05% - 219,267 (188,749) (454,256)
Southeast Wisconsin 60,043,039 3,787,589 6.31% 658,839 2,774,350 656,806 859,653
Southwest Cook 27,996,722 1,332,362 4.76% - 575,935 (36,345) (160,956)
West Cook 70,792,594 4,875,271 6.89% 1,256,879 847,135 (179,853) 71,566
TOTALS 1,298,546,937 75,062,268 5.78% 10,252,262 18,098,059 5,164,359 9,456,339
SECOND QUARTER 2019
3Lee & Associates of Illinois | Industrial Market Snapshot | 2q2019
CHICAGOLAND INDUSTRIALSUBMARKET MAP
Twelve Chicago-area submarkets experienced a second quarter decrease in vacancy rate from the previous quarter. I-55 Corridor and North Cook submarkets achieved the highest decrease, while I-57 Corridor and I-80 / Joliet submarkets had the highest increase for the quarter.
SE WISCONSIN
McHENRY COUNTY LAKE COUNTY
I-39 CORRIDOR
NORTH KANE
NW COOKNORTH COOK
O’HARECHICAGO NORTHWEST
COOK
NORTHDuPAGE
CENTRAL DuPAGE SW
COOKCHICAGO SOUTH
SOUTH COOKI-55 CORRIDOR
FOX VALLEY
JOLIET/ I-80 CORRIDOR
I-57 CORRIDOR
NW INDIANA
I-88 CORRIDOR
4 9450 W. Bryn Mawr Avenue, Suite 550 | Rosemont, IL 60018 | 773-355-3000 | www.lee-associates.com
Fifty-five construction projects totaling 18.1 million square feet are currently under construction. Speculative development accounts for 13.4 million square feet, or 74.2 percent of the ongoing activity. 25 construction projects were started during the second quarter of 2019 totaling 5.7 million square feet.
Second quarter new leasing volume totaled 9.3 million square feet, a 24.3 percent increase from the 7.4 million square feet registered in the first quarter. This volume also does compare favorably to one year ago when 7.0 million square feet were reported leased.
The highest volume of leasing transactions (6.2 million square feet) occurred in the 100,000 to 500,000-square-foot size range. This equates to 65 percent of all second quarter leasing activity. The two largest new leases involved Wholesale Interiors subleasing 549,500 square feet at 2805 Duke Parkway in Aurora and Silgan Containers leasing the 524,000-square-foot building recently developed by Zilber Property Group at the Kenosha Corporate Park.
The I-55 Corridor and O’Hare submarkets secured the most leasing volume during the second quarter, posting 1.9 million square feet and 1.0 million square feet, respectively. I-39 Corridor, I-57 Corridor and Rockford Area witnessed no new lease transactions.
User sales measured 1.8 million square feet in the second quarter, a 37.1 percent decline from the first quarter volume of 2.8 million square feet. The Chicago South submarket possessed the largest user sale volume totaling 589,000 square feet of activity. The largest user sale completed during the second quarter of 2019 involved EMCO Chemical Distributors Inc. acquiring a 513,000-square-foot facility at the CenterPoint Business Center in North Chicago.
Key Stats
Industrial Base 1,298,546,937
Vacancy Rate 5.78%
YTD New SF Delivered 10,252,262
SF Under Construction 18,098,059
Q2 Net Absorption 5,164,359
YTD Net Absorption 9,456,339
-1,500,000
-1,000,000
-500,000
0
500,000
1,000,000
1,500,000
Vacancy & AbsorptionNet Absorption by Submarket
CHICAGOLAND MARKET
0%
1%
2%
3%
4%
5%
6%
7%
8%
0.0
2.0
4.0
6.0
8.0
10.0
12.0
Q2 2015 Q2 2016 Q2 2017 Q2 2018 Q2 2019
Net Absorption Vacancy rate
Net A
bso
rptio
n(m
iilio
ns o
f SF) VacancyRate
Lee & Associates of Illinois | Industrial Market Snapshot | 2q2019 5
Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019Deliveries 5,389,725 2,381,545 3,871,762 4,078,994 6,173,268Under Construction 8,946,709 15,370,601 19,198,878 18,323,465 18,098,059
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
18,000,000
20,000,000
641
382
190
102 117
0
100
200
300
400
500
600
700
20k to 50k 50k to 100k 100k to 150k 150k to 200k 200k & Up
I-80/Joliet Area15%
I-55 Corridor11%
Lake County7%
West Cook6%
O'Hare6%
Chicago South6%
Others49%
0 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000
Q2 2018
Q3 2018
Q4 2018
Q1 2019
Q2 2019
Sold Leased
Leased & SoldConstruction
Available by SubmarketAvailable by Size
Notable Lease TransactionsAddress Size Type Landlord Tenant
160 Southcreek Pkwy., Romeoville 648,960 Renewal LaSalle Investment Management Samsung
2805 Duke Pky., Aurora 549,588 Sublease Duke Realty Wholesale Interiors
Kenosha Corporate Park, Kenosha 524,339 New Zilber Property Group Silgan Containers
145 S. Pinnacle Dr., Romeoville 469,920 New Prologis FedEx
880 S. Rohlwing Rd., Addison 308,782 Renewal/Expansion Blackstone REIT Ferguson Enterprises, Inc.
4050 Rock Creek Blvd., Joliet 291,728 New Oxford Properties Group Accuride
Notable Sale TransactionsAddress Size Type Seller Buyer
3 Building Portfolio in Bolingbrook 866,808 Investment Sun Life Assurance Company Prologis
2101 Dralle Rd., University Park 650,000 Investment BlueLinx Corporation Brennan Investment Corp.
3601 N. Skokie Hwy., North Chicago 512,713 User CenterPoint Properties EMCO Chemical Distributors Inc.
11905 Meridian Dr., Mount Pleasant 307,850 Investment Land and Lakes Development Hillwood Investment Properties
3327 W. 47th Pl., Chicago 217,000 User Individual Bitco Realty LLC
10550 86th Ave., Pleasant Prairie 196,300 Investment Wangard Partners Scannell Properties
Lee Transactions in RED
CHICAGOLAND MARKET
SECOND QUARTER 2019
9450 W. Bryn Mawr Avenue, Suite 550 | Rosemont, IL 60018 | 773-355-3000 | www.lee-associates.com6
LEE & ASSOCIATESWHO WE ARE...
About UsWith over 60 offices across the US and Canada, the Lee & Associates group of independently owned and operated companies is the largest regional commercial real estate services provider in the United States.
Each Lee & Associates group office represents a broad array of regional, national and international clients, from individual investors and small businesses, to large corporations and institutions.
Lee & Associates clients enjoy a comprehensive range of specialized commercial real estate services including industrial, office and retail property sales and leasing, real estate investment consulting, real estate financing, property acquisition and disposition, tenant representation and relocation, property and portfolio evaluation and market research.
Origin & PhilosophyIn 1979, founder Bill Lee established the first Lee & Associates office, driven by the unique idea to turn real estate brokers into company owners or “shareholders”. Bill Lee’s guiding philosophy was the clients’ interests would be best served by a collective team effort from experienced sales agents who had an ownership stake in the privately-held organization, earned through exceptional performance and ethical practice.
Not merely employees, profit-sharing Lee owner/agents would strive to create a sense of shared responsibility and cooperation throughout the organization, and would encourage an orientation toward long-term client relationships and business solutions.
Since then, Bill Lee’s profit sharing concept has proven enormously successful, and has fueled an explosive growth to include dozens of additional offices throughout the nation.
The Lee AdvantageFast Client Results. As company owners, Lee principals have a vested interest in the swift, successful completion of client assignments and transactions. Our associate brokers continually strive to earn ownership standing, encouraging a coordinated team effort and fast effective results for clients.
Streamlined Personal Service. Each Lee group office is owned and operated by the brokers in that office. Clients deal directly with decision makers, not with an unwieldy corporate bureaucracy like with many of our competitors.
Experience Counts. The average experience of Lee’s principal commercial brokers is 15-20 years. Our unique profit-sharing structure attracts the best people as owner brokers, only those with exceptional skills, confidence and ethical practice.
Long-Term Relationship. Lee & Associates boasts the lowest turnover rate in the industry. Our ownership structure encourages longevity, allowing for long term relationships with clients.
In-Depth Market Knowledge. Each Lee group office is committed to providing the best data and analysis for the market it serves. No other commercial real estate company has made specialized market knowledge and research as central to its business practice.
Business Stability. Since inception, each Lee & Associates group office has been profitable, privately-held and managed by its individual shareholders. Newly formed offices are stable, debt-free operations, with all startup capital funded by shareholders of all offices through Lee’s venture capital group.
Strong National Affiliations. Lee & Associates maintains affiliations with recognized brokers in all major US real estate markets. Lee’s national organization affiliations include: SIOR, NACOR, IFMA, CRE, ICSC , IDRC and CCIM.
SECOND QUARTER 2019
7Lee & Associates of Illinois | Industrial Market Snapshot | 2q2019
CHICAGOLAND MARKETBROKERAGE SERVICES
INDUSTRIAL SPECIALISTS
Michael Androwich, [email protected]
Rick AnesiVice [email protected]
Sean AustinVice [email protected]
Andrew BlockSenior [email protected]
Tom BoyleSenior Vice [email protected]
John Cassidy, [email protected]
Benjamin [email protected]
Thomas Condon, [email protected]
Brent De NobleSenior Vice [email protected]
Caroline DellMarketing / [email protected]
Ryan EarleyVice [email protected]
Nick EboliExecutive Vice [email protected]
Jay FarnamExecutive Vice [email protected]
Joseph FeeneySenior [email protected]
Kenneth [email protected]
Jeffrey [email protected]
Terry [email protected]
Jeffrey Janda, [email protected]
Ryan KehoeVice [email protected]
Walter [email protected]
Christopher [email protected]
Michael O’LearySenior [email protected]
David [email protected]
James Planey, [email protected]
Michael [email protected]
John Sharpe, [email protected]
Brad Simousek Associate 773.355.3016 [email protected]
Brian VanoskyPrincipal 773.355.3023 [email protected]
RETAIL SPECIALIST
A. Rick ScardinoPrincipal 773.355.3040 [email protected]
MULTI-FAMILY SPECIALIST RESEARCH SPECIALIST
Brian [email protected]
Diana PerezDirector of [email protected]
9450 W. Bryn Mawr Avenue, Suite 550 | Rosemont, IL 60018 | 773-355-3000 | www.lee-associates.com
SECOND QUARTER 2019
2019 - Toronto, ON2018 - Cincinnati, OH 2018 - Raleigh, NC2018 - Miami, FL2016 - Seattle, WA2016 - Walnut Creek2016 - Vancouver, BC Canada2016 - Twin Cities, MN2016 - Pasadena, CA2015 - Eastern Pennsylvania2015 - Columbus, OH2015 - Houston, TX2014 - Denver, CO
2014 - Cleveland, OH2013 - Long Island-Queens, NY2013 - Chesapeake Region , MD2012 - Edison, NJ2012 - Orlando, FL2012 - Charleston, SC2011 - Fort Myers, FL2011 - Manhattan, NY2011 - Greenville, SC2010 - Atlanta, GA2010 - Greenwood, IN2010 - Indianapolis, IN2009 - Long Beach, CA
2008 - Boise, ID2008 - ISG, LA, CA2008 - Palm Desert, CA2008 - Santa Barbara, CA2006 - Antelope Valley, CA2006 - Dallas, TX2006 - Madison, WI2006 - Oakland, CA2006 - Reno, NV2006 - San Diego - UTC, CA2006 - Ventura, CA2006 - San Luis Obispo, CA2005 - Southfield, MI
2005 - Los Olivos, CA2004 - Calabasas, CA2004 - St. Louis, MO 2002 - Chicago, IL2001 - Victorville, CA1999 - Temecula Valley, CA1996 - Central LA, CA1994 - Sherman Oaks, CA1994 - West LA, CA1993 - Pleasanton, CA1993 - Stockton, CA1991 - Phoenix, AZ1990 - Carlsbad, CA
1990 - Industry, CA1989 - LA - Long Beach, CA1989 - Riverside, CA1987 - Ontario, CA1984 - Newport Beach, CA1983 - Orange, CA1979 - Irvine, CA
THE LEE ADVANTAGELEE & ASSOCIATES IS THE LARGEST BROKER-OWNED COMMERCIAL REAL ESTATE FIRM IN NORTH AMERICA, AND ONE OF THE FASTEST GROWING!
Every Lee & Associates office delivers world class service to an array of regional, national and international clients - from small businesses and local investors to major corporate users and institutional investors. Our professionals combine the latest technology, resources and market intelligence with their experience,
expertise and commitment to superior service to optimize your results.
CHICAGOLAND INDUSTRIALMARKET SNAPSHOT
EXPLOSIVE GROWTH LOCAL EXPERTISE. INTERNATIONAL REACH. WORLD CLASS.
AFFILIATE INTERNATIONALRELATIONSHIP
THE POWER OF THE LEE NETWORK
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