In 2021, the Chicago metro area experienced an industrial boom unprecedented in decades. Not only are vacancies, net absorption and rental activity approaching (or in some cases exceeding) record numbers, the overall sales volume is also high. A new Avison & Young report offers figures on 2021 sales statistics for the nation’s major metropolitan areas, including Chicago, which had $ 5 billion in transactions through the end of October.
It’s no surprise that logistics, warehouses, and transportation companies are leading the charge across the country, and it’s no different in Chicago. Many of the biggest leases and construction completions this year in the Chicagoland area were for these types of businesses. And Avison Young concludes, as many others have done, that the industrial boom is expected to continue until next year.
“Much of the business can be traced to investor’s voracious appetite for e-commerce and logistics facilities that can connect retailers and other businesses to growing population centers. This is true in major industrial markets as well as growing secondary markets with strong connectivity to national distribution networks, ”the report explains. “The industrial sector has now passed this break in activity and all eyes are on continued growth in 2022.”
But how does Chicago compare to other major cities in terms of overall industrial sales between January and October 2021? The West Coast dominated the country in terms of investment, particularly Los Angeles with $ 6.1 million in transactions and the Inland Empire market with $ 4.9 billion. Like Chicago’s $ 5 billion in sales, Atlanta had $ 5.3 billion in transactions and Dallas scored $ 5.1 billion in industrial sales.
As long as there remains high interest in industrial deals from major investors, development and sales activity will continue through 2022, the report suggests.
“The Avison Young Industrial Capital Markets team expects strong investment activity to continue through 2022, with investors focused on portfolios capable of supporting the growing e-commerce industry through the last mile delivery, fulfillment and warehousing, ”the report says. “Large investment groups will continue to seek portfolios that allow them to expand their presence quickly and tap into this coveted industry.