Chicago’s Industrial Pipeline Grows, Vacancy Hits Double Digits

July 28, 2025

Market Updates Chicago Development In Focus More Industrial Investment Midwest

The metro's pipeline increased substantially year-over-year, Yardi Research Data shows.

Rendering of Plainfield Business Center's first industrial building in Plainfield, Ill. — Part of Plainfield Business Center, the speculative warehouse was designed to have 40-foot clear heights and 80 dock doors. Image courtesy of Trammell Crow Co.

Chicago’s industrial market showed mixed performance through the first five months of 2025, according to Yardi Research Data. Construction activity gained momentum, while deliveries and pricing trended downward.

The metro had 7.3 million square feet of industrial space underway in May, showing a significant increase from the 1.5 million square feet under construction during the same period last year. Meanwhile, industrial deliveries totaled less than half the volume recorded in the same period in 2024.

Despite the slowdown, Chicago remained one of the top-performing markets nationally in terms of completions and construction volume.

Construction activity accelerates

At the end of May, Chicago’s industrial sector had about 7.3 million square feet of space underway. The 22 developments under construction account for 0.7 percent of the metro’s total stock, below the 1.7 percent U.S. average. This marks a significant increase from the same period last year, when the pipeline comprised only 1.5 million square feet across four properties.

Among other major industrial markets, the metro fared better than New Jersey (6.9 million square feet), Indianapolis (4.6 million square feet) and Kansas City (2.6 million square feet). Phoenix (17.7 million square feet) maintained first place.

Rendering of 2700 York Road, an industrial project in Elk Grove Village, Ill. — The 2700 York Road facility will feature 16 dock doors, two drive-in doors and 124 vehicle parking spots. *Image courtesy of Logistics Property Co.*

Industrial construction starts remained modest, with just seven properties totaling 1.7 million square feet breaking ground. That figure accounts for only 0.2 percent of the metro’s total inventory, falling short of the 0.4 percent national average.

One of the largest projects underway is Trammell Crow Co.’s Plainfield Business Center, an industrial campus to comprise more than 8 million square feet in Plainfield, Ill. The first 788,000-square-foot speculative warehouse is slated for delivery this year.

This March, Logistics Property Co. purchased a nearly 6-acre site in Elk Grove Village, Ill., with plans to start construction on an industrial development. The site is just west of Chicago O’Hare International Airport and traded for $10.5 million. The company plans to develop a 123,000-square-foot rear-load industrial facility, situated at 2700 York Road. Completion is estimated for the second quarter of 2026.

Delivery volume falls, still outpaces most peer markets

Year-to-date through May, 4.3 million square feet of industrial space came online in Chicago. Deliveries accounted for 0.3 percent of the market’s total stock, slightly lower than the 0.6 percent national average. The metro’s industrial delivery volume fell to almost half its year-ago size, when 9.2 million square feet entered the market.

Compared to peer markets, only Phoenix (10.5 million square feet) and Kansas City (8.6 million square feet) surpassed the Windy City in industrial deliveries. New Jersey (2.5 million square feet), the Inland Empire (2.3 million square feet) and Indianapolis (752,500 square feet) trailed behind.

Uline Inc. has finished the expansion of its campus in Kenosha, Wis., with a 1.4 million-square-foot addition. The distribution center offers racking totaling approximately 882,900 square feet, as well as 476 dock doors and 41 bays. The site also features a stormwater pond.

Sales volume climbs, prices trail national average

Industrial sales volume totaled almost $1.1 billion year-to-date through May in the metro, with properties trading at an average of $93.36 per square foot, according to Yardi Research Data. Almost 12.4 million square feet spread across 108 properties changed hands.

The Windy City posted one of the lowest average sale prices among the top U.S. industrial markets. Prices in the Inland Empire ($247.89 per square foot) and New Jersey ($251.37 per square foot) were much higher than the $142.99 national average.

Aerial Image of the three-building portfolio in Elwood, Ill. — Stonepeak has acquired a three-building portfolio in Elwood, Ill., at the largest inland port in North America. *Image courtesy of Stonepeak*

This April, Stonepeak purchased a three-building, 1.7 million-square-foot rail-served logistics portfolio in the Chicago market from CenterPoint Properties. The sale price for the fully leased asset was $125 million. The properties are in Elwood, Ill., at 26318-26634 S. Walton Drive, 21561 Mississippi Ave. and 26634 Mississippi Ave.

NorthPoint Development has recently paid a combined $270 million for a 2.8 million-square-foot industrial portfolio in Elgin, Ill. High Street Logistics was the seller, after having acquired it for $230 million four years ago. The collection comprises 11 Class A warehouses located about 43 miles northwest of downtown Chicago.

Chiago’s vacancy reaches double digits

Chicago’ industrial vacancy rate at the end of May clocked in at 8.4 percent, slightly lower than the national average of 8.5 percent.

Exterior shot of the industrial building at 25340 S. Ridgeland Ave. in Monee, Ill. — The cross-dock industrial property is at 25340 S. Ridgeland Ave., within 20 miles of three intermodal yards. *Image by VHT Studios, courtesy of Seefried Industrial Properties*

At the beginning of this year, CenterPoint Properties signed a full-building lease with 3PL firm RJW Logistics Group for a 976,954-square-foot industrial facility in Joliet, Ill. The property is at 2903 Schweitzer Road inside the 6,400-acre CenterPoint’s Intermodal Center – Joliet/Elwood, North America’s largest inland port.

This March, Nuveen signed a 168,741-square-foot lease at its industrial facility in Monee, Ill., within Chicago’s Southern Will County submarket. NewAge Products joined the roster, bringing the property to full occupancy. Seefried Industrial Properties developed the 621,246-square-foot asset.