Report | Chicago Industrial Outlook - Q4 2010
The Chicago market is showing signs of recovery, with gradually increasing demand for warehouse and distribution facilities. Though speculative construction is virtually non-existent, leasing activity continues to gain momentum. The demand stems from companies looking at expansions and “right-sizing,” while maximizing lower lease rates and marketplace concessions.
2011 should be stronger as more industrial product is absorbed through increased leasing and sales. Lease rates will be cyclically low for another six to 12 months. Building opportunities are also hitting a pricing bottom. The result: opportunities to acquire property at significant occupancy cost savings.
Supply chain efficiencies remain a top priority, which bodes well for Chicago’s strength as an intermodal market.
Trend to watch: A shift from massive distribution centers to multiple locations with smaller square footage to better serve customer bases.
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