Chicago Industrial Submarket Report - Q1 2023

An increase in tenant demand in big box spaces during the quarter greatly contributed to the 11.9 million s.f. leased in Q1, up from the Q4 mark of 8.7 million s.f. However, the level one year ago eclipsed today’s output measuring 15.9 million s.f. The 250,000 s.f. to 500,000-s.f. realized the largest increase in demand from the prior quarter, through seven transactions compared to just four in Q4 2022.

Both quarter-over-quarter and year-over-year absorption noted a slowdown however occupier demand remains strong. Vacancy is hovering in the high two percent range nearly unchanged from 2022. Asking net rents reached $6.75 which is nearly a dollar than the start of 2022. We expect landlords to continue pushing higher face rates and annual escalation rates continue to climb.