Vacancy up, absorption down as winds shift across Chicago industrial market

Vacancy shot up in the Chicago industrial market at the close of 2023, although conditions remained marginally tighter than what was typically observed in 2020 and earlier. Market vacancy increased 100 basis points (bps) from Q3 2023, to 6.1%, and has either risen or held steady for six straight quarters. Of the more than 37.0 million square feet (msf) of 2023 new development across the market, over half remained vacant. Of note, Kenosha County saw vacancy increase 760 bps from the start of the year to 14.9%, largely a result of slackening demand for the 13.4 msf of new product delivering there in 2023. While the secondary market had been responsible for some of the market softening earlier in the year, available sublease supply declined in Q4 but remained above the long-term average.

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