All Of Chicago's Industrial Construction This Year Will Be Warehouses
The most popular product type in Chicago-area industrial real estate in 2018 will be warehouses. According to Marcus & Millichap's 2018 industrial investment forecast, warehouses are in high demand from investors because they can realize higher yields and appreciation. Investors will find plenty of inventory: all of the 13M SF in industrial real estate under construction this year is warehouses.
Marcus & Millichap Regional Director David Bradley said e-commerce demand continues to drive new warehouse construction, and investors are looking at warehouses as long-term holds, anticipating last-mile delivery models such as drones and driverless vehicles will become the norm. Bradley said he expects investor interest in warehouses to be especially heavy near the Tri-State Tollway, which provides easy access to Chicago and is surrounded by densely populated suburban areas.
The forecast calls for vacancy in the sector to fall to 5% this year, with O'Hare boasting the lowest vacancy rate in the area. Asking rents will rise to $5.74/SF this year, a 5.5% increase over last year.