The Chicagoland industrial real estate market has experienced 33 consecutive quarters of positive net absorption. As a result, across Chicago and the suburban collar counties, the vacancy rate for industrial space is hovering around 3.5%. Demand for industrial space is at record heights with vastly more prospective tenants in the market than spaces available. Although the Chicagoland market is red hot, the Lake County industrial market is even hotter!
With low tax rates, safe neighborhoods, top school districts, and a world class labor pool, Lake County is ideal for corporate site selection. Moreover, Lake County’s location, 30 minutes north of the City of Chicago and O’Hare place it as an ideal transportation and logistics hub. Accordingly, the Lake County sub-market enjoys the lowest rate in the region at less than 2.3%.
Despite the robust demand, rising construction costs, anxiety over tariffs, and limited availability of prime sites continues to hold back the supply of industrial real estate. As a result, the tight industrial market is fueling a rapid and sustained rise in the cost of leasing industrial space. Because rent is usually a significant line item for industrial businesses, businesses are beginning to feel the vacancy shortages impact on profitability. Additionally, continued easy capital availability, low interest rates, and the increased desire to escape higher rents has made purchasing low cost industrial properties a challenge. For many businesses looking to escape high rents, sales prices offer no relief in many of Lake County’s sub-markets. For modern Lake County manufacturing and warehouse buildings expect prices to continue to increase.
Even finding functional industrial spaces in the greater Chicago area is challenging for some tenant. A disproportionate share of share of the industrial space remaining available in Illinois is older and functionally obsolete. Therefore, many businesses without experienced brokerage teams are left without good opportunities to upgrade their space.
Although there is no perfect solution to the tight vacancy in the marketplace, starting your search early is critical. Moreover, when looking for Lake county industrial space, an experienced brokerage team can help you find the right property at the right price. Furthermore, in the tight marketplace it is essential that you are prepared to act quickly to secure industrial property that meets your business’s needs.
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