Chicago market fundamentals hold steady as tepid occupier demand prevails

Industrial market vacancy remained elevated throughout Greater Chicago in the third quarter of 2024 but showed signs of a possible inflection point. The market’s vacancy rate increased by 170 basis points (bps) from a year ago to 6.8% but fell 10 bps from the previous quarter. This marked the first quarter-over-quarter vacancy decline in more than two years. However, net absorption remained well below the long-term average as some occupiers reevaluated their space requirements. Additionally, some requirements were reported to be on hold and touring activity has slowed, at least in the short term, ahead of the fall election. Further interest rate cuts may also encourage more activity.

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