In 2021, the Chicago metro area has witnessed an industrial boom that has not been seen in decades. Not only are vacancies, net absorption and leasing activity approaching (or in some cases, surpassing) record numbers, overall sales volume is also high. A new report from Avison & Young offers figures on 2021 sales stats for major metro regions across the country, including Chicago, which has had $5 billion in transactions through the end of October.
It should be no surprise that logistics, warehouses and transportation businesses are leading the charge across the country, and it’s no different in Chicago. Many of this year’s biggest lease deals and construction completions in the Chicagoland region were for these types of companies. And Avison Young concludes, as many others have, that the industrial boom is expected to continue well into next year.
“Much of the activity can be tied to investors’ voracious appetite for e-commerce and logistics facilities that can connect retailers and other businesses to growing population centers. This is true in core industrial markets as well as growing secondary markets with strong connectivity to national distribution networks,” the report explains. “The industrial sector has now moved beyond that pause in activity and all eyes are on continued growth in 2022.”
But how does Chicago stack up to other major cities in overall industrial sales between January and October 2021? The west coast has led the nation in investment, specifically Los Angeles with $6.1 million in transactions and the Inland Empire market with $4.9 billion. Similarly to Chicago’s $5 billion in sales, Atlanta has had $5.3 billion in transactions and Dallas has scored $5.1 billion in industrial sales deals.
As long as there remains elevated interest in industrial deals from major investors, there will be continued development and sales activity into 2022, the report suggests.
“The Avison Young Industrial Capital Markets team expects solid investment activity to continue into 2022, with investors focused on portfolios that can support the growing e-commerce sector through distribution, fulfillment and last-mile warehousing,” the report reads. “Large investment groups will continue to search for portfolios that allow them to expand their presence quickly and tap into this coveted sector.”