Chicago’s industrial market had a strong first half of 2026, with big-box tenants helping to deliver one of the best leasing quarters in years.

Industrial net absorption hit 6.1M SF in Q2, over five times the first quarter and more than eight times the total from a year earlier, according to CBRE. The positive absorption was the strongest quarter for the Chicago area since the high mark of 6.9M SF in the second quarter of 2023.

“Developers and owners who have a prescient view of the industrial market either have sites tied up or have some planned spec product,” CBRE Executive Vice President David Prell said. “That's kind of across the board of all different sizes, and in particular the bulk product.”

Big-box leasing is helping to drive Chicago’s strong year, with tenants signing eight leases over 750K SF in 2026, according to CBRE. In its ranking of the 100 largest leases signed in the first half of the year, Chicago ranked third in square feet signed at 9.4M SF, behind Southern California and Dallas-Fort Worth.

Chicago had nine leases on the list, up from the six of 4.9M SF in the first half of 2025, with four of those leases being renewals.

Prell said the market is seeing strong leasing demand from third-party logistics companies, packaging companies and companies servicing data centers. Those servicers often provide parts, work on data center cabinets or store batteries.

KeHE Distributors signed the largest lease of the quarter with a 1.2M SF deal at 21533 S. Cherry Hill Road in Joliet. Hyundai Translead followed close behind, agreeing to take 900K SF at 3635 Youngs Road in suburban Channahon.

The companies inking deals on newer spaces are chasing power availability to automate their facilities, Prell said. That includes more electronic material-handling equipment and automatic retrieval systems.

Cap rates on newer buildings from the industrial construction boom during the pandemic have ticked up over the last couple of years, leading to higher rental rates, Prell said. Data center demand is also swallowing up large tracts of land, making newly built facilities have a more expensive land basis.

Nationally, sales of land slated for future data center development totaled about $3.3B in the first three months of 2026, up 141% during the same time frame in 2025. Roughly 30% of total capital deployed on development sites in Q1 went to data center land deals, up from about 19% in 2025.

In certain cases, industrial projects can face less community pushback than data centers and can be easier for developers to get the green light on, Prell said. This is particularly true in established industrial areas.

“If it's already zoned for [industrial], it seems like it's easier to get that approved as opposed to a new data center,” Prell said.

Owners are looking to differentiate their industrial products by adding elements like efficient truck court circulation, secured sites, speculative offices with remote restrooms and higher-quality dock equipment, Prell said.

Asking rents are climbing alongside the uptick in demand: up to $9.33 per SF in Q2, or 7.4% year-over-year, according to CBRE. That’s well ahead of the national industrial rent growth rate of 2.1%.

Prell expects more speculative development given the lack of available space for larger users in the area, as well as strong absorption across the region’s submarkets.

“If you need over 850K SF in Chicago, there really is nowhere to go,” Prell said. “We're bullish on the long-term viability of bulk distribution product.”