Brown Commercial: What’s ahead for O’Hare and DuPage industrial?

July 2023 —

Mid-Year Market Overview

Strong demand and a shortage of industrial space continues to shape the outlook for Chicago’s industrial sector, according to Brown Commercial Group’s analysis of the market at mid-year. With freight traffic seeing double digit increases at the airport and development activity strong in DuPage County, there are many signs of continued growth in the Chicago market.

Here’s a look at the market as we head into the second half of the year.

O’Hare Submarket

The O’Hare submarket remains a top location for many industrial businesses and continues to see limited space availability. With a 2.9% vacancy rate as of June 2023, the O’Hare submarket saw rents increase by 8.4% over the past 12 months. There was 1.4 million square feet (msf) of net absorption over the same time period, along with 2 msf of construction deliveries. Freight traffic moving through the airport increased by nearly 10% over the past year as some businesses shifted their distribution away from congested West and East coast ports, according to CoStar research.

Central Kane/DuPage County

Development is hot in this region of Chicago, with inventory increasing by 8.2% over the past three years. During that time, 5 msf of industrial space was added. The submarket has a 3.5% vacancy rate, which is near its 10-year low. There is another 1.1 msf of space slated for completion by the end of the year, which could lead to an uptick in vacancy. Rental growth dropped a bit to 8.6%, but is still well above the 2.6% all-time average for this submarket.