Pat Crowley comments on O’Hare industrialBrown Commercial Group
Oct. 7, 2023 — When France Media asked Brown Commercial Group for insights on the O’Hare industrial market, Broker Pat Crowley stepped up to provide his observations. Here are Pat’s key takeaways on this coveted submarket, as noted in this recent Heartland Real Estate Business story, appearing in the publication’s October magazine.
O’Hare Industrial Market Overview
Land scarcity — Industrial developers are scouring the market looking for land suitable for development, but the options are few and far between. Because O’Hare is a mature, infill location and their is considerable demand for land parcels, developers are tasked with assembling multiple parcels of land to create a new development. Many sites have been purchased in recent years and many of the remaining ones are not as desirable due to site issues, lot configuration or zoning obstacles.
Cargo traffic boost — O’Hare International Airport ranks #1 in North America for cargo traffic and recorded a 9% jump in cargo activity from 2021 to 2022. The O’Hare industrial market is a top choice for many industrial businesses due to its proximity to the airport and surrounding transportation corridors.
Strong fundamentals — The O’Hare submarket has historically been a hot spot for industrial businesses looking to tap into the airport’s logistics operations and the Chicago area’s network of transportation corridors. According to CoStar, the vacancy rate for industrial space in the O’Hare submarket is a super low 3.3%, lower than the overall Chicago market rate of 4.2%. Due to strong tenant demand and a limited supply of space for rent, rent growth reached nearly 8% over the last 12 months, hitting a record $10.60 per-square-foot.
Leasing activity in this submarket has slowed some after the robust pandemic-era volume. There was 1.9 million square feet of new space delivered over the past 12 months.
Reach out to Pat Crowley for more on Chicago’s industrial market.