Big Leases, Build-to-Suit Deliveries Push Demand to New High
Demand reached a new high during the third quarter of 2019, as net absorption totaled 9.2 million square feet for the period, the greatest quarterly total since the current cycle began. This impressive gain in occupancy was buoyed by the delivery of 4.6 million square feet of build-to-suit construction projects, also a record for the ongoing development cycle.
The market recorded 111 new leases or lease expansions totaling 8.2 million square feet, highlighted by a 1.2-million-square-foot lease by Target and a 826,755-square-foot lease by UNIS Logistics, both in Joliet. Due to this activity, the overall vacancy rate decreased by 10 basis points to 6.15 percent, the eighth quarter in a row this rate has decreased and the lowest rate recorded since the first quarter of 2001.
27 construction projects totaling 8.8 million square feet were delivered during the third quarter of 2019, more than any other quarter since the development cycle began in 2013. 68 projects totaling 17.6 million square feet are under construction - 49 of these projects are being developed on a speculative basis, totaling 11.8 million square feet.
