Chicago's Industrial Market Sees Vacancy Decrease to 11.3% in 3Q
29 Oct, 2010, Chicago
Cushman & Wakefield third quarter statistics for the U.S. industrial market show the vacancy rate in Chicago at 11.3 percent at the end of the third quarter, down from 11.5 percent at midyear 2010. The overall U.S. industrial vacancy rate remained unchanged from midyear, ending the third quarter at 10.6 percent, after peaking at 10.8 percent at the end of the first quarter of this year.
Year-to-date leasing activity for the U.S. industrial market totaled 189.8 million square feet at the end of the third quarter of 2010, an 11.9 percent increase in activity from the 169.5 million square feet leased at this time last year. Leasing activity in Chicago decreased to 16.6 million square feet, compared to 18.8 million square feet at the end of the third quarter of 2009.
The year-to-date overall absorption rate for the U.S., a measure which indicates the net change in occupied space, was negative 6.2 million square feet at the end of the third quarter, a 94.7 percent increase in absorption from the negative 118.5 million square feet at the end of the third quarter of 2009. Chicago's absorption rate was negative 4.0 million square feet at the end of the third quarter, compared to negative 14.1 million square feet at this time last year.
"While the overall vacancy rate remains unchanged, we are fairly confident that it has hit its peak," said Jim Dieter, executive vice president of Cushman & Wakefield's Industrial Services and based in Chicago. "With continued improvements in leasing activity, we should start to see some downward movement in the overall vacancy rate through the end of the year."
Industrial construction remained at historic lows in the third quarter of 2010. Year-to-date product completions totaled 12.3 million square feet for the U.S., down 77.9 percent from the 55.8 million square feet completed at this time last year. Construction completions totaled only 1.4 million square feet year-to-date with 135,200 square feet under construction as of third quarter, keeping pace with the historic lows reported this year. Development of new product will remain limited until market fundamentals return to equilibrium.
"With nearly 14 million square feet expected to be completed through the remainder of the year, 2010 is on track to see the most limited amount of new construction added to the market since Cushman & Wakefield began tracking the market," said Maria Sicola, executive managing director and head of Americas Research for Cushman & Wakefield.
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