Future Cities
Chicago Market
2025 North America Industrial Big-Box Review & Outlook
May 22, 2024 5 Minute Read
Supply & Demand
With 619 million sq. ft. of total inventory, Chicago is North America’s largest industrial big-box market. Demand did not keep pace with the previous year, with lease volume falling to 29.5 million sq. ft. Despite the decline, it was the fourth-highest in North America. Lower lease volume led to a 23% decline in positive net absorption. This decline, coupled with a record-setting 33.7 million sq. ft. of construction completions, caused vacancy rates to rise to 5.8%, more than double the 2.5% seen in 2022. Despite higher vacancies, rents increased in all major size ranges, resulting in an overall 25.2% rise for firs-year taking rents compared to 2022.
In 2023, big-box developers in Chicago struggled to initiate new projects due to difficulties in construction financing, resulting in a 53% reduction in space under construction. Nearly 50% of this space is preleased, indicating that available first-generation space will decrease this year. This reduction is expected to help stabilize vacancy rates and support continued rent growth in the coming quarters.
Figure 4: Share of 2023 Leasing by Occupier Type
Source: CBRE Research.
Figure 5: Lease Transaction Volume by Size Range
Source: CBRE Research.
Figure 6: 2023 Construction Completions vs. Overall Net Absorption by Size Range
Figure 7: Direct Vacancy Rate by Size Range
Figure 8: Under Construction & Percentage Preleased
Figure 9: First Year Taking Rents (psf/yr)
Source: CBRE Research.
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Industrial & Logistics Research
James Breeze
Vice President, Global Industrial and Retail Research
John Morris
President, Americas Industrial & Logistics, Advisory Services
