Chicago's Big Box Market Sets New Leasing Record
New leases and lease expansions in big box buildings totaled 5.3 million square feet among 27 leases signed during the third quarter of 2018, a record quarterly new leasing volume. Despite this significant development, five leases totaling 2.5 million square feet - nearly half of the space leased this quarter - involved build-to-suit leases or pre-leased space in planned or under construction buildings. Therefore, this activity will not impact the big box vacancy rate or net absorption until the buildings are delivered.
The big box vacancy rate decreased by only two basis points to 9.02 percent between July and September. Several large new vacancies offset the impact of significant leasing activity during the quarter, resulting in the negligible change. Net absorption totaled 1.5 million square feet during the third quarter of 2018, bringing the tally for the first three quarters of the year to 8.4 million square feet.