Metropolitan Chicago
Market Review
Industrial Market Review
Third Quarter 2013
To our valued customers, partners and future clients…
As I was sifting through a pile of unfiled papers earlier this week, I came
across the notebook with the 2013 goals I had written back in January. I
had split the items into categories and while the business column looked
pretty good, I was disheartened as I looked through the personal goals. All
the rosy ambitions to eat better and exercise more somehow got lost in the
shuffle over the past ten months, crowded out by the urgent matters of life
and buried under the growing list of other commitments.
The recent government shutdown and congressional gridlock was a great
reminder that the curveballs will keep coming. The continuing improvement
in Chicagoland’s office and industrial markets seen within this market review
testifies to the resilience of our economy and the tenacity of our businesses
and workers. In business and government as in life, things don’t always go
as planned. Circumstances can be an excuse, or they can be a challenge
to overcome.
When I first saw my list of unachieved goals my immediate reaction was,
“Nice try, better luck next year,” but I caught myself. The third quarter’s end
provides a great opportunity to take stock and pledge to finish the year
strong, to refocus on the things we had hoped to achieve back when 2013
was 365 fresh days full of potential. Once the holiday cards start coming
in, there’s a tendency to look ahead. Any football coach will tell you that’s
a mistake. One day at a time, one transaction at a time - there is plenty of
time left this year to make a difference, whether in business or in personal
goals. Let’s finish strong.
Regards,
John R Picchiotti
COO, Brokerage
Table of
Contents
NAI Hiffman Metropolitan Chicago
Industrial Market Review
Third Quarter 2013
04
07
08
10
12
Local Economy
Industrial Statistics
Industrial Market Summary
Industrial Construction
Industrial Submarket Overviews
12
14
16
18
20
22
24
26
28
30
32
34
36
38
40
42
44
46
Southeast Wisconsin
Lake County
I-90/Northwest
Northwest Cook
North Cook
Fox Valley
Central DuPage
O’Hare
West Cook
Chicago
I-88 Corridor
I-55 Corridor
South Cook
I-80/Joliet Corridor
Northwest Indiana
Industrial Investment Review
Methodology/NAI Global
NAI Hiffman
Overall Trend
Local Economy
Unemployment
9.7%
POPULATION (2010 CENSUS)
9,461,105
POPULATION CHANGE (2000-2010)
+4.0%
MEDIAN HOUSEHOLD INCOME (2010)
$57,104
GROSS METRO PRODUCT (2011)
$546 BILLION
LABOR FORCE
4,186,513 
TOTAL NONFARM JOBS GAINED (7/12-7/13)
65,400 
CHICAGO METRO UNEMPLOYMENT RATE
9.7% 
ILLINOIS UNEMPLOYMENT RATE
9.2% 
U.S. UNEMPLOYMENT RATE
7.2% 
Case-Schiller Home
Price Index
125.7
Q2 US GDP Change
2.5%
The third largest metropolitan area in the U.S. after New York and Los Angeles, Chicago is the most influential economic
region between the East and West Coasts. Foreign Policy Magazine recently ranked Chicago sixth among world competition,
measuring econometrics from the number of Fortune 500 companies to the flow of goods and services through airports and
ports. Situated at the geographical heart of the nation, Chicago’s locational advantages have fostered its development into
an international center for banking, securities, high technology, air transportation, business services, wholesale and retail
trade, and manufacturing. In addition, Chicago is one of the principal trading centers for commodities, financial, and derivative
futures products with the Chicago Mercantile Exchange and Board of Trade.
Quarter in Review
Political and capital market uncertainty continues to hold back the economic recovery as we head towards the end of 2013.
Despite the first government shutdown in nearly 18 years and another highly publicized debt ceiling debate and threat of the
United State defaulting, the economy continues to grow. Second quarter U.S. gross domestic product figures were revised
upward in August to a 2.5% annual growth rate from the previously estimated 1.7% growth rate. This pick up in economic
growth has been attributed to increased business investment, solid consumer spending and a continued impressive housing
Jobs Lost and Regained by City
Unemployment and Work Force Participation
Jobs
Lost
Jobs
Regained
Houston
117,000
293,000
250%
6.2%
New York City
140,000
291,000
208%
8.4%
Dallas/Fort Worth
153,000
306,000
200%
6.2%
City
Washington, D.C.
Percent Unemployment
Regained
Rate
78,000
130,000
167%
5.6%
Boston
105,000
159,000
151%
6.4%
Atlanta
207,000
159,000
77%
8.4%
San Francisco
168,000
129,000
76%
6.7%
Chicago
288,000
184,000
64%
9.7%
Los Angeles
382,000
191,000
50%
9.9%
Source: Bureau of Labor Statistics, Linneman Associates
68%
12%
67%
10%
66%
8%
65%
6%
64%
4%
63%
‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12
Metro Chicago Unemployment Rate
U.S. Labor Force Participation Rate
‘13
2%
U.S. Unemployment Rate
Source: Bureau of Labor Statistics
4 NAI Hiffman
recovery. This outpaced the 1.1% growth witnessed during the
first quarter of the year and is the highest growth period since
the third quarter of last year. Four years after the official end
of the recession, U.S. per capita economic output has finally
returned to the pre-crisis peak reached in 2007.
A budget deficit that equals nearly 8% of the U.S. gross
domestic product, increased taxes and spending cuts in
Washington continue to threaten the economic recovery,
but conditions continue to slowly and steadily improve.
Fundamentals have brightened throughout the year, highlighted
by resilient consumer spending and broad private sector
employment growth. Many feared that the housing recovery
would slow once mortgage rates began to climb, and while
those rates have come up from where they were a year or even
six months ago, they have apparently reached a plateau for the
time being, and the housing market continues on its impressive
rebound. The dramatic increase in home prices witnessed
in some markets has not been due to low interest rates, but
rather due to a lack of inventory and fewer housing starts than
expected. Despite a boom in housing construction during the
first half of the past decade, the country has under-produced
single-family homes when looking at the decade a whole. U.S.
household real wealth is finally back on trend, but citizens are
still well below normal in terms of real purchasing power.
Local Economy
U.S. Business Confidence
70
60
50
40
30
2006
2007
2008
2009
2010
2011
2012
2013
Source: Tradingeconomics.com, Institute for Supply Management
Unemployment by Duration
80%
70%
60%
50%
40%
‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12
Unemployed <15 weeks
20%
Unemployed >15 weeks
Source: Bureau of Labor Statistics
Corporate Profits vs. Job Openings
6 MM
2000
5 MM
1500
4 MM
1000
3 MM
500
2 MM
‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12
Corporate Profits After Tax ($)
‘13
At some point, the political and economic uncertainty that has
affected consumer sentiment and the overall recovery will be
gone. It may take years until this happens, but at that point
the country will likely be poised for stunning economic growth.
While additional major world events, political debates and debt
concerns loom, there is simply too much pent-up demand for
the economic recovery to be denied.
30%
‘13
Chicago continues to lag the rest of the country when it
comes to the job recovery. Only 64% of the jobs lost due to
the recession have been recovered in the Chicago MSA, while
several other large metropolitan areas have fully recovered or
in some cases doubled the number of jobs held prior to the
downturn. Texas continues to be the country's strongest job
market, with the Houston MSA regaining 250% of the jobs
lost due to the economic recession, and is experiencing an
impressive 6.2% unemployment rate. Similarly, New York City
has regained 200% of the jobs lost due to the downturn. Hiring
continues to expand, with 65% of industries adding workers,
suggesting the job recovery is broad. Until 75% of the jobs lost
in a market are recovered, companies are just filling office desks
that were vacated during the recession.
0
U.S. Non-Farm Job Openings (#)
Source: Bureau of Labor Statistics & Bureau of Economic Analysis
5
Chicago Industrial Submarkets
Lake
Geneva
Industrial Market Overviews
43
1 Southeast
Beloit
Kenosha
Regional
Airport
1
Wisconsin . . . . .12
2 Lake County . . . . . . . . . . .14
3 McHenry County
Pleasant Prairie
Westosha
Airport
Wisconsin
Illinois
Kenosha
Wisconsin
Illinois
4 I-39 Corridor/Rockford Area
Zion
90
Waukegan
Regional Airport
5 DeKalb County
39
Fox Lake
6 I-90 Northwest . . . . . . . . .16
Waukegan
7 Northwest Cook . . . . . . . .18
8
Rockford
McHenry
2
3
North Cook . . . . . . . . . . . .20
94
Libertyville
9 Fox Valley . . . . .Belvidere
. . . . . . . .22
Crystal Lake
Cherry
10 Central
DuPage . . . . . . . . .24
Lake Forest
Vernon Hills
Valley
Lake Zurich
90
13 Chicago North . . . . . . . . . .30
East
Dundee
6
15 I-88 Corridor . . . . . . . . . . .32
39
90
7
Arlington
Heights
Elgin
16 Southwest Cook
17 I-55 Corridor . . . . . . . . . . .34
South Elgin
DeKalb
St Charles Airport
Geneva
West Chicago
20 Northwest Indiana . . . . . . .40
21 I-57/Will Corridor
4
15
88
Lincolnwood
90
Franklin Park
355 Elmhurst
Naperville
Evanston
Skokie
11
12
Melrose
Park
88
North Aurora
Sugar Grove
Niles
Wood Dale
Batavia
5
8
Elk Grove
10
Dupage
9
Grove
290 Village Int'lOhare
Airport
Bloomingdale
19 I-80/Joliet Corridor . . . . . .38
94
294 Morton
Des Plaines
Schaumburg
Streamwood
18 South Cook . . . . . . . . . . . .36
helle
Chicago
Executive
Airport
Palatine
Hampshire
14 Chicago South . . . . . . . . .30
Highland Park
Buffalo
Grove
Downers
Grove
Chicago
290
Cicero
16
55
La Grange
14
Chicago Midway
Airport
Burr
Ridge
Aurora
13
94
Bedford Park
Montgomery
Bridgeview
Bolingbrook
17
Plainfield
294
Alsip
55
Palos
Heights
Romeoville
355
57
Blue Island
18
Gary/Chicago
Airport
South
Holland
Tinley Park
Joliet
Shorewood
39
19
80
80
57
55
6 NAI Hiffman
M
Park Forest
Monee
21
Hammond
20
Chicago
Heights
Elwood
Ottawa
80 94
Mokena
Minooka
La Salle
90
Illinois
12 West Cook . . . . . . . . . . . .28
Indiana
11 O’Hare. . . . . . . . . . . . . . . .26
Industrial Market Statistics
Third Quarter 2013
Submarket
# Bldgs
Total RBA
Vacancy
Available
3Q13 NET
2013 YTD Net
3Q13 New
3Q13 Under
(SF)
Rate (%)
Rate (%)
Absorption (SF)
Absorption(SF)
Supply (SF)
Constr. (SF)
7.4% 
9.2% 
-57,593
-65,933
0
35,000
11.0% 
162,860
318,601
0
0
Chicago North
1,102
63,661,848
Chicago South
1,694
149,620,792
North Cook
709
45,842,324
6.0% 
8.6% 
-14,433
166,743
0
0
West Cook
732
59,486,743
7.8% 
10.5% 
2,885
312,785
0
0
Southwest Cook
490
39,829,458
5.6% 
6.8% 
-17,761
250,870
0
152,670
1,125
85,311,064
8.8% 
10.9% 
116,510
563,161
0
36,000
82
13,772,467
17.6% 
19.2% 
184,374
-221,296
0
0
Lake County
934
67,257,186
7.1% 
10.5% 
265,806
821,836
158,306
218,500
Northwest Cook
524
28,431,207
6.5% 
8.4% 
68,102
160,657
0
0
O’Hare
1,718
99,904,689
7.1% 
10.4% 
502,609
1,924,538
0
570,498
Central DuPage
1,096
67,232,050
5.6% 
8.4% 
501,874
969,733
156,820
203,973
I-55 Corridor
659
81,708,730
6.3% 
12.4% 
-395,162
1,446,506
238,000
1,013,528
McHenry County
435
25,395,823
13.3% 
13.6% 
21,034
-200,095
0
0
I-90/Northwest
435
26,313,608
8.0% 
11.1% 
267,031
431,897
203,217
472,854
Fox Valley
496
32,378,205
8.4% 
8.4% 
179,890
448,677
0
0
I-88 Corridor
773
62,092,314
7.2% 
8.2% 
281,807
443,481
80,000
350,000
I-80/Joliet Corridor
620
66,479,526
10.4% 
12.0% 
2,057,094
2,860,615
1,765,048
1,180,911
57
6,970,869
7.6% 
8.4% 
-40,900
-46,130
0
0
I-39 Corridor
221
24,613,891
18.6% 
20.0% 
-206,112
-106,220
0
667,360
Southeast Wisconsin
526
44,432,094
7.8% 
180,191
591,301
0
1,014,543
Northwest Indiana
432
35,752,057
7.2% 
11.0% 
99,687
254,512
100,000
605,228
1,531
72,591,894
15.2% 
16.0% 
104,424
61,518
0
0
16,391 1,199,078,839
8.5% 
10.9% 
4,264,217
11,387,757
2,701,391
6,521,065
South Cook
I-57/Will Corridor
DeKalb County
8.9% 
9.7% 
Flex Space Summary
Total Flex Space
Total Market
Totals
The data compiled in the Chicago Industrial and Office Market Reviews is the legal property of NAI Hiffman. Reproduction or dissemination of the information
contained herein is strictly prohibited without the expressed written consent of NAI Hiffman. This review contains information, including information available to
the public, which has been relied upon by NAI Hiffman on the assumption that it is accurate and complete without independent verification by NAI Hiffman. NAI
Hiffman accepts no responsibility if this should prove to be inaccurate or incomplete. No warranty or representation, express or implied, is made by NAI Hiffman
as to the accuracy or completeness of the information contained herein, and same is submitted subject to errors, omissions, and changes in market conditions.
7
Overall Trend
Industrial Market
Vacancy Rate
# INDUSTRIAL BUILDINGS
16,391
MARKET SIZE (SF)
1,199,078,839
TOTAL VACANCY
102,022,492 SF (8.51%)
DIRECT VACANCY
98,635,970 SF (8.23%)
SUBLEASE VACANCY
3,386,522 SF (0.28%)
AVAILABLE SPACE
130,507,883 SF (10.88%)
3Q13 NET ABSORPTION (SF)
4,264,217
YTD 2013 NET ABSORPTION (SF)
11,387,757
UNDER CONSTRUCTION (SF)
6,521,065
3Q13 NEW SUPPLY (SF)
2,701,391
8.51%
Net Absorption
4,264,217 SF
Asking Rents
Pictured above: 1160 W Crossroads Pky in Romeoville, where paint company Valspar leased 400,856 SF during the third quarter
Chicago is the second largest industrial market in the U.S. with nearly 1.2 billion SF of inventory, second only to the Greater
Los Angeles industrial market. The Chicago industrial market remains the most influential in the Midwest, due to its growing
prominence as an inland port and its diverse, comparatively low-cost labor force. It has the second largest workforce in the
country and is the largest manufacturing market. Chicago’s strategic location and transportation infrastructure make it the
most important transportation center in the country. Located in the path of three of the nation’s busiest transcontinental
expressways (I-80, I-90 and I-94), Chicago also claims 70 percent of the nation’s rail and intermodal activity. The metropolitan
area sits at the convergence of all six class-one railways and within a day’s drive of one-third of the country’s population.
Quarter in Review
Demand for industrial space increased during the third quarter, as more than 4.2 million SF of vacant space was absorbed
through continued leasing activity and user sales. This activity pushed the overall vacancy rate down 20 basis points to end
the quarter at 8.51%. Since this rate peaked at 12.1% more than three years ago, it has improved by nearly 3.6%. Year-todate net absorption totals nearly 11.4 million SF, suggesting that if the current rate of absorption continues through the end of
the year, Chicago's industrial market will absorb more than 15 million SF over the course of 2013, the highest annual tally the
market has seen since 2007. The I-80/Joliet Corridor recorded the highest absorption tally for the third quarter, largely in part
Industrial Vacancy | Absorption
Quarterly Net Absorption by Submarket
6 MM
14%
2 MM
12%
2,500,000
Net Absorption (SF)
2,000,000
Q3 2013 Total Net
Absorption: 4,264,217 SF
1,500,000
-2 MM
10%
-6 MM
8%
1,000,000
500,000
0
-10 MM
6%
I-55 Corridor
Chicago North
I-39 Corridor
Southwest Cook
DeKalb County
North Cook
West Cook
Northwest Cook
McHenry County
Northwest Indiana
Chicago South
South Cook
Fox Valley
I-57/Will Corridor
SE Wisconsin
Net Absorption (SF)
-500,000
I-90 Northwest
8 NAI Hiffman
2013
Lake County
Vacancy Rate (%)
2012
I-88 Corridor
2011
Central DuPage
2010
I-80/Joliet Corridor
2009
O’Hare
‘08
Industrial Market
due to the completion of three build-to-suit projects
totaling nearly 1.8 million SF. The I-55 Corridor, which
has been one of the leading submarkets during the
recovery, recorded nearly 400,000 SF of negative net
absorption due to the departure of several sizable
tenants leaving behind new vacancies.
Largest Blocks of Available Space
Despite absorption turning negative in the I-55
Corridor, the third quarter's two largest transactions
occurred there. Exeter Property Group purchased
the 579,900 SF building that is fully-leased to
Sony Entertainment located at 333 Gibraltar Dr in
Bolingbrook's Corporate Crossing business park for
$26,050,000 and paint company Valspar Corp leased
400,856 SF in the recently constructed speculative
building at 1160 W Crossroads Pkwy in Romeoville.
Submarket
Building Address
City
Block Size (SF)
Chicago
4000 W Diversey Ave
Chicago
1,449,000
I-80/Joliet Corridor
3851 Youngs Rd
Joliet
1,001,184
I-80/Joliet Corridor
501 International Pky
Minooka
849,691
North Cook
5959 W Howard St
Niles
756,560
I-55 Corridor
901 Carlow Dr
Bolingbrook
747,152
I-55 Corridor
1070 Windham Pky
Romeoville
723,291
I-57/Will Corridor
5800 W Industrial Dr
Monee
700,200
I-55 Corridor
1450 Remington Blvd
Bolingbrook
650,494
I-57/Will Corridor
2101 Dralle Rd
University Park
650,000
Total Sale Transactions and Price PSF
80 MM
$60
60 MM
$50
825
$40
128 177
$30
$20
2013
2012
2011
2010
330
222
# Total # Sold
330
2008
2007
2006
2005
2004
2003
2002
2001
2000
Total SF Sold (Annualized)
2009
0
199
470
403
593
395
384
409
20 MM
762
40 MM
658
Conditions improved for the thirteenth consecutive
quarter in Chicago's industrial market, and the
vacancy rate dropped to a healthy 8.51%. However,
10.88% of the market is currently listed as available
for lease, suggesting that if tenants vacate their
currently occupied spaces without landlord finding
new tenants and if demand for space dips, the
vacancy rate could increase over the coming quarters.
Average Price PSF
Industrial Market – Significant Sale Transactions
3rd Quarter 2013
Submarket
Building Address
Size (SF) Sale Price
Price PSF
Buyer
Seller
I-55 Corridor
333 Gibraltar Dr, Bolingbrook
579,900
$26,050,000
$45
Exeter Property Group
TA Associates Realty
Central DuPage
437-515 Tower Blvd, Carol Stream
515,497
Undisclosed
Undisclosed
TA Associates Realty
LaSalle Investment Management
South Cook
21751 Jason Rasmussen Dr, Sauk Village 496,260
$15,384,500
$31
Warehouse Specialists, Inc
Dermody Properties, Inc
I-80/Joliet Corridor
2780 McDonough St, Joliet
442,000
$21,000,000
$48
Jones Lang LaSalle
Exeter Property Group
Southeast Wisconsin Business Park of Kenosha, Kenosha
354,000
Undisclosed*
Undisclosed* Kenall Manufacturing Co
LaSalle Investment Management
Chicago South
2801 S Western Ave, Chicago
312,154
$6,211,500
$20
Venture One/DRA Advisors LLC
Friedman Realty LLC
Chicago South
2635 S Western Ave & 2658 S Leavitt St
306,797
$34,000,000
$111
Bridge Development/Hunt Realty Gearing Stone
Chicago South
2845 W 48th Pl, Chicago
153,410
$2,500,000
$16
Private investor
Industrial Market – Significant Lease Transactions
Westex, Inc
3rd Quarter 2013
Submarket
Property Address
Leased (SF)
Tenant
Lease Type
I-55 Corridor
1160 W Crossroads Pky, Romeoville
400,856
Valspar Corp
New lease
I-80/Joliet Corridor
801 Midpoint Rd, Minooka
365,359
Electrolux
Lease expansion
Northwest Cook
798-800 Albion Ave, Schaumburg
250,262
3D Exhibits, Inc
New lease
I-55 Corridor
389-501 Frontage Rd, Bolingbrook
217,023
Data Services Solutions, Inc
Lease renewal/expansion
South Cook
16750 Vincennes Rd, South Holland
202,902
Jacobson Warehouse
New lease
I-55 Corridor
1075 W Taylor Rd, Romeoville
184,057
Exel Logistics
Lease renewal/expansion
Central DuPage
1575 Hunter Rd, Hanover Park
181,635
MSC Industrial Supply Co
Lease expansion/renewal
Fox Valley
950 N Raddant Rd, Batavia
170,462
Accuride Corporation Inc
New lease
South Cook
7770 W 71st St, Bridgeview
166,663
Menasha Packaging Company, LLC
New lease
*Build-to-suit sale
Entries highlighted in red denote NAI Hiffman transactions
9
New Development
Historical Industrial Shell Cost
Speculative construction continues to expand in the Chicago
industrial market, now accounting for 46% of the ongoing
construction activity. The I-55 Corridor is seeing the most
speculative development, with four buildings totaling just over 1
million SF currently underway. Nearly 3 million SF of build-to-suit
projects are currently under construction, accounting for another
45% of the current construction activity. In total, more than 6.5
million SF is under construction in Chicago's industrial market, with
several additional planned projects waiting in the wings.
$50
$40
$30
$10
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
Assumptions: 5% office space, 30' clear ceilings, precast construction, one dock per every
10,000 SF of warehouse, design and permits included
Southeast
Wisconsin
118,500 SF 425,000 SF
Beloit
Wisconsin
Illinois
1,000,000 SF
2000
Industrial Under Construction Map
100,000 SF
250,000 SF
500,000 SF
$20
Lake
Geneva
43
50,000 SF
Westosha
Airport
471,043 SF
Zion
90
39
McHenry
County
200,000 SF
Rockford
Rockford
Area
218,500 SF
Fox Lake
Waukegan
McHenry
Belvidere
81,000 SF
58,021 SF
County
Crystal Lake
94
Libertyville
Vernon Hills
Cherry
Valley
Lake Forest
Lake Zurich
90
Buffalo
Grove
Highland Park
100,234 SF
Chicago
Palatine
30,000 SF
Executive
94
Airport
342,620 SF
Northwest
Arlington
I-90
294 Morton
North
90
Heights
Cook
Evanston
Northwest
Grove
Cook
Des Plaines
87,836 SF
123,840 SF
South Elgin
35,000 SF
150,520 SF Lincolnwood
Chicago
64,192 SF
North
139,781 SF 208,302 SF
90
Dupage
St Charles Airport
West
94
DuPageElmhurst
Fox Valley
Melrose
Geneva
Cook
Park
West Chicago
355
290
Chicago
Hampshire
39
DeKalb
helle
lle
le
e
327,360 SF
140,000 SF
DeKalb
County
Batavia
350,000 SF
North Aurora
I-39
Corridor
Sugar Grove
88
Cicero
55
Downers
152,670 SF
Aurora
I-88 Corridor
Montgomery
Chicago Midway
Airport
36,000 SF
Ridge
602,600 SF
Bridgeview
115,224 SF
115,224 SF
180,480 SF
294
Alsip
Palos
Heights
57
Blue Island
South Cook
355
South
Holland
Tinley Park
39
80
Speculative Construction Project
Build-to-Suit Construction Project
Building Addition Construction Project
La Salle
10 NAI Hiffman
Ottawa
80
Mokena
90
50,228 SF
350,000 SF
150,000 SF
90,000 SF
Park Forest
Chicago
hic
hicago
Heights
485,000 SF
695,911 SF
115,000 SF
I-57/Will
Corridor
Monee
Elwood
Elw
Chicago
South
57
M
N
North
India
Industrial Market
Construction Deliveries
Industrial Construction by Type
25 MM
Building Additions (9%)
570,860 SF
20 MM
15 MM
Speculative (46%)
2,984,581 SF
14 million SF
10 MM
Total Under Construction
6,521,065 SF
5 MM
Build-to-Suit (45%)
2,965,624 SF
2013*
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
0
Total Deliveries (SF)
20-Year Average (SF)
Ongoing Speculative Construction Projects
3rd Quarter 2013
Submarket
Building Address
Size (SF)
User
Developer
Central DuPage
1580 Hecht Dr, Bartlett
64,192
N/A
Private partnership
Central DuPage
201 Gary Ave, Roselle
139,781
N/A
Panattoni/LaSalle Investment Mgmt
I-55 Corridor
700 S Weber Rd, Bolingbrook
602,600
N/A
IDI
I-55 Corridor
2143 Internationale Pky, Woodridge
180,480
N/A
HSA Commercial/Industrial Income Trust
I-55 Corridor
606 Territorial Dr, Romeoville
115,224
N/A
Panattoni Development Company
I-55 Corridor
612 Territorial Dr, Romeoville
115,224
N/A
Panattoni Development Company
I-80/Joliet Corridor
CenterPoint Intermodal Center-Joliet
485,000
N/A
CenterPoint Properties
I-90 Northwest
2501 Galvin Dr, Elgin
342,620
N/A
Conor Commercial/Globe Corp
I-90 Northwest
64-92 Prairie Pky, Gilberts
100,234
N/A
Interstate Partners
Lake County
2431 N Delany Rd, Waukegan
218,500
N/A
HSA Commercial Real Estate
Northwest Indiana
Ameriplex at the Port, Portage
50,228
N/A
Holladay Properties
O'Hare
1925 Busse Rd, Elk Grove Village
208,302
N/A
Panattoni Development Company
O'Hare
2201 W Lunt Ave, Elk Grove Village
150,520
N/A
Bridge Development Partners
O'Hare
2475 Touhy Ave, Elk Grove Village
123,840
N/A
Bridge Development Partners
O'Hare
1601 Estes Ave, Elk Grove Village
87,836
N/A
CenterPoint Properties
Ongoing Build-to-Suit Construction Projects
3rd Quarter 2013
Submarket
Building Address
Size (SF)
User
Developer
I-39 Corridor
Loves Park
200,000
Woodward Inc
Woodward Inc
I-39 Corridor
Steward Rd, Rochelle
140,000
Coated Sand
Coated Sand
I-80/Joliet Corridor
Internationale Centre South, Minooka
695,911
Trader Joe's Distribution
Prologis
I-88 Corridor
543 Frontenac Ct, Naperville
350,000
Ozark Automotive Distributors, Inc
Ozark Automotive Distributors, Inc
I-90 Northwest
2661 Galvin Ct, Elgin
30,000
Newhaven Display International Inc
Newhaven Display International Inc
Northwest Indiana
Coffee Creek Center, Chesterton
350,000
Urschel Laboratories Inc
Urschel Laboratories Inc
Northwest Indiana
Ameriplex at the Crossroads, Merrillville
115,000
Dawn Foods
Holladay Properties
South Cook
5300-5444 W 73rd St, Bedford Park
36,000
Intermodal Maintenance Group LLC
Intermodal Maintenance Group LLC
Southeast Wisconsin
LakeView Corporate Park, Pleasant Prairie
471,043
Ta Chen International Inc
WISPARK/CenterPoint
Southeast Wisconsin
Sturtevant
425,000
United Natural Foods Inc
United Natural Foods Inc
Southwest Cook
8901 W 47th St, McCook
152,670
Golden State Foods
Golden State Foods
11
South
Milwaukee
43
Muskego
Franklin
Oak Creek
Southeast Wisconsin
# INDUSTRIAL BUILDINGS
45
526
94
32
36
MARKET SIZE (SF)
44,432,094
TOTAL VACANCY
3,469,537 SF (7.81%)
DIRECT VACANCY
3,469,537 SF (7.81%)
SUBLEASE VACANCY
0 SF (0.0%)
AVAILABLE SPACE
4,316,602 SF (9.72%)
3Q13 NET ABSORPTION (SF)
180,191
YTD 2013 NET ABSORPTION (SF)
591,301
UNDER CONSTRUCTION (SF)
1,014,543
3Q13 NEW SUPPLY (SF)
38
Mt. Pleasant
Racine
31
Sturtevant
Union Grove
Burlington
41
142
83
Kenosha
Regional
Airport
Kenosha
50
45
83
0
32
Pleasant Prairie
Westosha
Airport
31
Wisconsin
Illinois
Zion
Vacancy Rate
Net Absorption
Asking Rents
94
7.81%
Waukegan
Regional Airport
Fox Lake
180,191 SF
Gurnee
Waukegan
Grayslake
McHenry
Demand in Southeast Wisconsin is driven by users in Illinois seeking lower operating costs, economic development incentives
and perceived tax advantages. While the inventory of developable land in Lake County is limited, Southeast Wisconsin
offers users more alternatives and aggressive financial incentives more difficult to secure south of the border. The Lakeview
Corporate Park in Pleasant Prairie and the Kenosha Enterprise Park are two of the submarket’s premier industrial parks. The
area is home to an international roster of companies including newcomer Ta Chen, S.C. Johnson, IRIS, Yamaha and Jelly
Belly. Other significant users in the area include Jockey International, U-Line & Abbott. 2013 has been a busy year for current
land owners and developers attempting to secure sites to accommodate multiple highly-publicized build-to-suit projects in
Southeast Wisconsin. There have been a number of significant projects targeting or considering a number of business parks
and sites. Groundbreaking could occur this year on a number of developments in Southeast Wisconsin, further emphasizing
the attractiveness of this submarket to corporate users and developers alike.
Vacancy | Absorption
Inventory by City
1,200,000
15%
800,000
13%
400,000
11%
Kenosha (16%)
0
9%
-400,000
7%
-800,000
Burlington (6%)
‘08
2009
2010
2011
Vacancy Rate (%)
2012
2013
5%
Racine (34%)
Sturtevant (17%)
Net Absorption (SF)
Pleasant Prairie (26%)
Vacancy has dropped to its lowest level
in more than five years and development
activity continues to increase
12 NAI Hiffman
Southeast Wisconsin
Quarter in Review
The vacancy rate in Southeast Wisconsin continued to drop
during the third quarter for the 17th consecutive quarter,
dropping by 40 basis points to 7.81% by the end of September.
Net absorption totaled 180,191 SF for the quarter, bringing the
tally for the first three quarters of the year to 591,301 SF.
2,000,000
1,500,000
1,000,000
500,000
0,000
Development activity continues to increase in the Southeast
Wisconsin submarket, with construction continuing on Ta Chen’s
new 471,043 build-to-suit distribution center in Pleasant Prairie
and a new 425,000 SF facility for United Natural Foods (UNFI)
in Sturtevant. Construction is also underway on a 118,500
SF building addition for McLane Foodservice in Sturtevant’s
GrandView Business Park. Only nine options for more than
100,000 SF of contiguous space are currently available in the
submarket. The overall forecast continues to look positive for
Southeast Wisconsin.
20,000-49,999
SF Available
50,000-99,999
SF Available
200,000+
SF Available
0
5
10
15
Building Address
Size (SF)
Sale Price
Business Park of Kenosha, Kenosha
354,000
5718 52nd St, Kenosha
191,529
20
25
30
35
Largest Blocks of Available Space
Building Address
City
Block Size (SF)
9201 Wilmot Rd
Pleasant Prairie
363,468
8505 100th St
Pleasant Prairie
256,240
1220 Mound Ave
Racine
200,000
5612 95th Ave
Kenosha
160,300
9501 80th Ave
Pleasant Prairie
150,128
3030 S Sylvania Ave
Sturtevant
146,000
Significant Southeast Wisconsin Sale Transactions
3rd Quarter 2013
Price PSF
Buyer
Seller
Undisclosed*
Undisclosed*
Kenall Manufacturing Co
LaSalle Investment Management
$1,550,000
$8
Carter Property Management
Johnson Bank
%
%
Significant Southeast Wisconsin Lease Transactions
3rd Quarter 2013
Property Address
Leased (SF)
Tenant
Lease Type
3030 S Sylvania Ave, Sturtevant
108,957
CNH
New lease
8901 102nd St, Pleasant Prairie
105,637
Hanna Cylinder
New lease
8201 104th St, Pleasant Prairie
23,037
Rehrig Penn Logistics
Lease expansion
%
2013
Blocks of Available Space
100,000-199,999
SF Available
Looking Forward
*Build-to-suit sale
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
One of the largest new leases signed during the third quarter
involved industrial grade tie-rod and custom engineered cylinders
manufacturer Hanna Cylinders leasing the 105,637 SF facility at
8901 102nd St in Pleasant Prairie’s LakeView Corporate Park
East. The company plans to move its operations from Libertyville
to the building by the end of the year. The lease, combined with
commercial lighting manufacturer Kenall Manufacturing Co’s
announcement that the company plans to move its headquarters
and 400 jobs to a new 354,000 SF facility in Kenosha from
Gurnee are both examples of companies leaving Lake County for
the incentives and financing packages being offered in Southeast
Wisconsin.
Construction Deliveries
2,500,000
Foreclosure sale, deferred maintenance
13
p
Kenosha
Lake County
Wisconsin
Illinois
173
173
Zion
83
# INDUSTRIAL BUILDINGS
934
MARKET SIZE (SF)
67,257,186
4,797,393 SF (7.13%)
DIRECT VACANCY
4,768,413 SF (7.09%)
SUBLEASE VACANCY
28,980 SF (0.04%)
AVAILABLE SPACE
7,051,146 SF (10.2%)
3Q13 NET ABSORPTION (SF)
265,806
YTD 2013 NET ABSORPTION (SF)
821,836
UNDER CONSTRUCTION (SF)
218,500
Waukegan 137
Regional Airport
94
45
TOTAL VACANCY
3Q13 NEW SUPPLY (SF)
Pleasant Prairie
Westosha
Airport
Fox Lake
Gurnee
41
Waukegan
Grayslake
North
Chicago
21
12
Libertyville
176
Mundelein
176
60
Vernon Hills
Lake Zurich
158,306
60
Lake Forest
41
22
22
Highland Park
Buffalo
Grove
Glencoe
Vacancy Rate
Net Absorption
7.13%
265,806 SF
Chicago
Executive
Airport
Palatine
Asking Rents
Hoffman 90
294
Arlington
Heights
Morton
Grove
Estates
94
l
The Lake County industrial submarket is notable for its roster of corporate headquarters and heavy concentration of
owner-occupied real estate, all located within close proximity to the I-94 Tri-State Tollway. Entrepreneurial owners and
corporate managers residing along the lakefront and northwest Lake County make this area attractive for investment. Large
corporations including Abbott, Baxter, Caremark, Takeda, Walgreens and WMS join privately-held companies such as CDW,
Medline and ULINE to form a vibrant base of employment. Lake County’s relatively low property tax rates attract companies
from Cook County, although infrastructure demands have begun to slightly even the playing field.
Vacancy | Absorption
Inventory by City
15%
900,000
Other Suburbs (23%)
600,000
13%
300,000
11%
0
9%
-300,000
7%
Mundelein (6%)
5%
North Chicago (6%)
-600,000
‘08
2009
2010
2011
Vacancy Rate (%)
2012
2013
Net Absorption (SF)
Waukegan (23%)
Vernon Hills (5%)
Lake Zurich (7%)
Libertyville (11%)
Gurnee (10%)
Buffalo Grove (9%)
Two large tenants announced plans
to move to Southeast Wisconsin from
Northern Illinois during the third quarter
14 NAI Hiffman
Lake County
Quarter in Review
Demand picked up in the Lake County submarket during
the third quarter, as several new leases combined to result
in 265,806 SF of vacant space being absorbed. This activity
pushed the vacancy rate down 18 basis points to 7.13% by the
end of September.
Construction Deliveries
1,200,000
1,000,000
800,000
Two building additions were completed during the third quarter,
including an 87,777 SF expansion to FedEx’s Grayslake
ground distribution facility and a 70,529 SF expansion to Laser
Precision’s building in Libertyville. HSA Commercial and Bostonbased Great Point Investors broke ground on a new 218,500
SF speculative facility in Waukegan’s Delany Commerce Center
which will be divisible to 25,000 SF suites.
400,000
200,000
0
2013
2012
2011
2010
2009
2008
2007
2006
2005
The Lake County submarket saw the announcement of two
large tenants moving their operations to Southeast Wisconsin
during the third quarter. Hanna Cylinders is leaving its building in
Libertyville with a 105,637 SF lease in Pleasant Prairie and Kenall
Manufacturing Co announced plans to build a new 354,000 SF
headquarters facility in Kenosha, leaving its facility in Gurnee.
2004
Blocks of Available Space
20,000-49,999
SF Available
50,000-99,999
SF Available
100,000-199,999
SF Available
200,000+
SF Available
0
20
40
60
80
100
Largest Blocks of Available Space
Building Address
Looking Forward
2003
2002
2001
2000
Several class "B' Lake County buildings were sold during the
third quarter, the largest of which being a 96,529 SF building
on 5.51 acres located at 3725 Hawthorne Ct in Waukegan.
Privately-owned manufacturing and distribution company AB
Specialty Silicones bought the building for about $36 PSF.
The largest lease of the third quarter involved specialty bag
manufacturer Brown Paper Goods expanding its presence in the
area with a 64,148 SF lease at 1585-1705 S Waukegan Rd in
Waukegan.
600,000
City
Block Size (SF)
3818 Grandville Ave
Gurnee
345,232
700-750 Corporate Grove Dr
Buffalo Grove
330,132
601 N Skokie Hwy
North Chicago
326,033
45-85 Albrecht Dr
Lake Bluff
256,298
1700 Old Deerfield Rd
Highland Park
245,141
5650 Centerpoint Ct
Gurnee
213,141
Significant Lake County Sale Transactions
3rd Quarter 2013
Building Address
Size (SF)
Sale Price
Price PSF
Buyer
Seller
3725 Hawthorne Ct, Waukegan
96,529
$3,471,573
$36
AB Specialty Silicones
CenterPoint Properties
1900 W Winchester Rd, Libertyville
83,944
$3,285,000
$39
Midwest Industrial Funds
K&R Enterprises I, Inc
927 N Shore Dr, Lake Bluff
60,025
$2,050,000
$34
Kovitz Investment Group
Edidin Associates
101 Hart Rd, Barrington
38,500
Undisclosed
Undisclosed
Wickstrom Auto Group
AT&T
Significant Lake County Lease Transactions
3rd Quarter 2013
Property Address
Leased (SF)
Tenant
Lease Type
1585-1705 S Waukegan Rd, Waukegan
65,663
Horizon
Lease renewal
1585-1705 S Waukegan Rd, Waukegan
64,148
Brown Paper Goods
New lease
1400 Harris Rd, Libertyville
40,255
Kratos Volleyball
New lease
3541-3661 Burwood Dr, Waukegan
38,419
Omnicell, Inc
Lease renewal
1451-1485 S Lakeside Dr, Waukegan
31,929
Horizon
New lease
150 Oakwood Dr, Lake Zurich
30,063
Homerun Sports & Fitness LLC
New lease
905 Lakeside Dr, Gurnee
17,893
Kenall Manufacturing
New lease
Entries highlighted in red denote NAI Hiffman transactions
15
I-90 Northwest
# INDUSTRIAL BUILDINGS
435
MARKET SIZE (SF)
26,313,608
Crystal Lake
L
90
TOTAL VACANCY
2,113,321 SF (8.03%)
DIRECT VACANCY
2,041,676 SF (7.76%)
SUBLEASE VACANCY
71,645 SF (0.27%)
AVAILABLE SPACE
2,907,964 SF (11.%)
3Q13 NET ABSORPTION (SF)
267,031
YTD 2013 NET ABSORPTION (SF)
431,897
UNDER CONSTRUCTION (SF)
472,854
3Q13 NEW SUPPLY (SF)
203,217
B
31
25
Carpentersville
Hampshire
72
East
Dundee
47
Hoffman
Estates
20
Elgin
Sc
31
South Elgin
Bartlett
Bl
St Charles
Dupage
Airport
Geneva
West Chicago
Vacancy Rate
Net Absorption
8.03%
267,031 SF
Asking Rents
Batavia
North Aurora
88
Napervill
The I-90 Northwest industrial submarket is attractive to companies looking for excellent interstate access, relatively low taxes,
potential incentives and a strong labor pool. Most of the industrial inventory base in the submarket is located within minutes
of one of several 4-way intersections with I-90. This serves to make the I-90 Northwest submarket a good distribution point
for companies that are serving the I-90/upper-midwest supply chain. The availability of developed land and continued easy
access in to the Chicago market have always been a key asset of the area. Additionally, the Elgin area provides an abundant,
educated labor pool. Population along and near the Fox River has increased dramatically over the past decade. More than
73% of the total submarket inventory is located in Elgin.
Vacancy | Absorption
Inventory by City
450,000
15%
300,000
13%
150,000
11%
East Dundee, Genoa,
Hampshire, etc. (10%)
South Elgin (5%)
0
9%
-150,000
7%
Marengo (5%)
Carpentersville (7%)
-300,000
‘08
2009
2010
2011
Vacancy Rate (%)
2012
2013
5%
Net Absorption (SF)
Elgin (73%)
Construction continues to increase, with
two speculative facilities underway and
one completed this quarter
16 NAI Hiffman
I-90 Northwest
Quarter in Review
Following a brief setback during the second quarter, demand
turned positive again during the third quarter, as 267,031 SF of
vacant space was absorbed through leasing activity and user
sales. This activity pushed the vacancy rate down 31 basis
points to end the quarter at 8.03%, a rate 1.47% below the rate
recorded a year ago and 3.67% below the peak vacancy rate
recorded in early 2010.
900,000
600,000
300,000
0
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
Construction started during the third quarter on a 100,234 SF
speculative facility located at 64-92 Prairie Pky in Giblert’s Prairie
Business Park, where Hardware Resources signed a 36,000 SF
lease this quarter. In the same park, a 203,217 SF speculative
facility was completed this quarter. A 30,000 SF build-to-suit
facility for Newhaven Display International Inc is now underway
in Elgin’s Northwest Corporate Park. A 342,620 SF speculative
facility remains under construction in the same park in Elgin and
is anticipated to be completed by the end of the year.
1,200,000
2000
Denver-based Industrial Income Trust purchased the 100,294
SF building located at 2755 Alft Ln in Elgin’s Randall Crossings
business park for about $75 PSF in August, expanding its
portfolio of Chicago market industrial buildings. The largest lease
signed during the third quarter involved grill manufacturer WeberStephen Products Co expanding by 72,408 SF at 2700 Alft Ln in
Elgin. The company has been in the building since 2010.
Construction Deliveries
1,500,000
Blocks of Available Space
20,000-49,999
SF Available
50,000-99,999
SF Available
100,000-199,999
SF Available
200,000+
SF Available
0
5
10
15
20
25
30
Largest Blocks of Available Space
Building Address
City
Block Size (SF)
2500-2560 Galvin Dr
Elgin
547,668
Looking Forward
305-325 Corporate Dr
Elgin
150,692
Twelve of the past fourteen quarters have witnessed positive
demand in the I-90 Northwest submarket, which has pushed the
vacancy rate below pre-recession levels. Few large contiguous
blocks of space remain available, suggesting that absorption
may slow over the coming quarters, but remain positive.
300 N West St
Marengo
145,135
201 N Prospect St
Marengo
121,153
2780-2794 Spectrum Dr
Elgin
120,091
2545-2555 Northwest Pky
Elgin
110,343
200-220 Corporate Dr
Elgin
76,318
Significant I-90 Northwest Sale Transactions
3rd Quarter 2013
Building Address
Size (SF)
Sale Price
Price PSF
Buyer
Seller
2755 Alft Ln, Elgin
100,294
$7,550,000
$75
Industrial Income Trust, Inc
Seigle Investments LLC
1125 Jansen Farm Dr, Elgin
38,953
$1,979,348
$51
Trio Pines USA
Fontana America, Inc
2475 Millenium Dr, Elgin
26,000
$1,535,000
$59
Absolute Machine Tools, Inc
Private trust
125 Prairie Lake Rd, East Dundee
32,300
$1,425,000
$44
Dakota International LLC
Cell-Parts Manufacturing Co
Significant I-90 Northwest Lease Transactions
3rd Quarter 2013
Property Address
Leased (SF)
Tenant
Lease Type
2700 Alft Ln, Elgin
72,408
Weber-Stephen Products Co
Lease expansion
1690 Cambridge Dr, Elgin
41,007
Geka Manufacturing Corporation
Lease renewal
64-92 Prairie Pky, Gilberts
36,000
Hardware Resources
New lease
150 Corporate Dr, Elgin
23,519
Bob King Auctions
New lease
Entries highlighted in red denote NAI Hiffman transactions
17
17
y
y
North
Chicago
94
Libertyville
Northwest Cook
# INDUSTRIAL BUILDINGS
Mundelein
al Lake
Lake Zurich
524
28,431,207
TOTAL VACANCY
1,846,246 SF (6.49%)
DIRECT VACANCY
1,801,066 SF (6.33%)
SUBLEASE VACANCY
45,180 SF (0.16%)
AVAILABLE SPACE
2,381,511 SF (8.38%)
3Q13 NET ABSORPTION (SF)
68,102
YTD 2013 NET ABSORPTION (SF)
160,657
0
3Q13 NEW SUPPLY (SF)
0
Barrington
68
Net Absorption
6.49%
44,718 SF
14
53
East
Dundee
12
62
58
Elgin
Hoffman
Estates
Chicago
Executive
Airport
Palatine
59
Arlington
Heights
90
294
Mt. Prospect
20
uth Elgin
Des Plaines
19
Streamwood
290
Bartlett
Bloomingdale
Asking Rents
Elk Grove
Village
294 Franklin Park
355
Geneva
Ohare
Int'l Airport
Wood Dale
Dupage
Airport
Elmhurst
West Chicago
atavia
Melrose
Park
88
The Northwest Cook submarket is a desirable business location for entrepreneurial owners and corporate managers who
reside in the area’s suburban communities. The submarket is conveniently located close to Chicago’s O’Hare International
Airport and has excellent access to Chicago and the western suburbs using I-90, I-290 and Route 53. The user base
generally consists of specialized manufacturing and service companies. Many international companies, particularly Asian
and European, have located their North American headquarters here due to the proximity to the airport. Few modern
distribution facilities exist relative to neighboring submarkets. This submarket is dominated by flex, technology and research
and development space. Predominantly an infill market there are still a few large land sites and business parks available for
new construction. Many users come from the comparatively cramped O’Hare submarket looking for newer construction or a
location closer to their residences. However, Cook County taxes remain a concern to some users.
Vacancy | Absorption
Inventory by City
500,000
15%
250,000
13%
0
11%
-250,000
9%
-500,000
7%
-750,000
‘08
2009
2010
2011
Vacancy Rate (%)
2012
2013
Streamwood, Hoffman
Estates, etc. (9%)
Rolling Meadows (8%)
Schaumburg (35%)
Bartlett (8%)
Barrington (9%)
5%
Net Absorption (SF)
Palatine (12%)
Mt. Prospect (19%)
Large swings in absorption or vacancy
are unlikely due to few available large
contiguous blocks of space
18 NAI Hiffman
Mo
Gr
72
Schaumburg
t Charles
Vacancy Rate
High
Buffalo
Grove
MARKET SIZE (SF)
UNDER CONSTRUCTION (SF)
Lake Fore
Vernon Hills
Northwest Cook
Quarter in Review
Conditions continued to improve in the Northwest Cook
submarket during the third quarter. The area has now
experienced positive absorption in all but one quarter of the
past four years. During the third quarter alone, 68,102 SF was
absorbed through leasing activity and user sales. The vacancy
rate decreased 24 basis points beteween June and September
to 6.49%, one of the lowest vacancy rates the submarket has
seen in many years.
Construction Deliveries
1,000,000
800,000
600,000
400,000
Industrial metal fitting supplier and manufacturer Samwon
Tech USA purchased a 30-year-old industrial building located
at 1261 Wiley Rd in Schaumburg in July. Samwon Tech paid
$5.15 million for the 98,456 SF industrial facility, or about $52
PSF. The company will only occupy a portion of the building
while generating rental income from leasing the remainder of the
building. Corporate exhibit and events company 3D Exhibits,
Inc signed the largest new lease of the third quarter, leasing the
250,262 SF industrial facility located at 798-800 Albion Ave in
Schaumburg for its new headquarters location.
200,000
0
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
Blocks of Available Space
20,000-49,999
SF Available
50,000-99,999
SF Available
100,000-199,999
SF Available
200,000+
SF Available
Looking Forward
Largely an infill market, the Northwest Cook submarket hasn’t
seen any new construction activity since 2009. Since the area
vacancy rate peaked at 13.79% during the third quarter of 2009
vacancy has decreased by 7.3% over the past four years. Only
three spaces remain available offering 100,000 SF of contiguous
space or more, suggesting that tenants looking for large
footprints may have more luck in other neighboring submarkets
such as O'Hare or Central DuPage.
0
5
10
15
20
25
Largest Blocks of Available Space
Building Address
City
2222 N Hammond Dr
Schaumburg
119,000
1000 E Business Center Dr
Mt. Prospect
110,000
1660 Wall St
Mt. Prospect
108,732
800 Biermann Ct
Mt. Prospect
89,370
140 E Commerce Dr
Schaumburg
76,867
Significant Northwest Cook Sale Transactions
Block Size (SF)
3rd Quarter 2013
Building Address
Size (SF)
Sale Price
Price PSF
Buyer
Seller
1261 Wiley Rd, Schaumburg
98,456
$5,150,000
$52
Samwon Tech USA
Barry Mason
555-563 S Vermont St, Palatine
43,600
$925,000
$21
Aimtron Corporation
Wintrust Bank
Significant Northwest Cook Lease Transactions
3rd Quarter 2013
Property Address
Leased (SF)
Tenant
Lease Type
798-800 Albion Ave, Schaumburg
250,262
3D Exhibits, Inc
New lease
2266 Palmer Dr, Schaumburg
35,510
AVI/SPL
Lease renewal
900-950 N Business Center Dr
30,205
BladeRoom LLC
New lease
1400-1440 E Business Center Dr
23,558
Littlefuse Inc
New lease
3810-3850 Industrial Ave, Rolling Meadows
5,000
Ticor
New lease
Entries highlighted in red denote NAI Hiffman transactions
19
Lake Forest
non Hills
94
North Cook
Highland Park
Buffalo
Grove
# INDUSTRIAL BUILDINGS
709
MARKET SIZE (SF)
45,842,324
TOTAL VACANCY
2,745,856 SF (5.99%)
DIRECT VACANCY
2,745,856 SF (5.99%)
SUBLEASE VACANCY
0 SF (0.0%)
Wheeling
3,963,942 SF (8.65%)
3Q13 NET ABSORPTION (SF)
-14,433
YTD 2013 NET ABSORPTION (SF)
0
3Q13 NEW SUPPLY (SF)
0
43
294
ngton
eights
58
Morton
Grove
lk Grove
Village
Evanston
94
14
Des Plaines
166,743
UNDER CONSTRUCTION (SF)
Northbrook
Mt. Prospect
AVAILABLE SPACE
Glencoe
68
21
Chicago
Executive
Airport
41
Niles
Park
Ridge
Skokie
Lincolnwood
Ohare
Int'l Airport
d Dale
90
Franklin Park
Vacancy Rate
Net Absorption
94
Asking Rents
Elmhurst
5.99%
Melrose
Park
-14,433 SF
Oak Park
290
Desirable for users seeking quick access to Chicago, major area expressways, and the northern suburbs, the North Cook
submarket is also attractive to long-term Chicago-based users looking to stay close to the city while escaping Chicago
congestion. The area has the advantage of an inventory of buildings with better specifications than many of the antiquated
buildings found in the city of Chicago. It tends to be a primarily owner/user market, with limited leasing opportunities. The user
base generally consists of service providers and light manufacturers who tend to remain in their locations for extended periods
of time, resulting in limited transaction velocity in the submarket. The inventory base is mostly comprised of 1960s–1970s-era
buildings with lower ceilings and low parking ratios. Higher taxes may be a deterrent for some users, while others are willing to
pay the price for the location.
Vacancy | Absorption
Inventory by City
9%
500,000
Glenview, Lincolnwood,
Evanston, etc. (15%)
300,000
Wheeling (28%)
7%
100,000
Morton Grove (8%)
-100,000
5%
Northbrook (12%)
-300,000
-500,000
‘08
2009
2010
2011
Vacancy Rate (%)
2012
2013
3%
Net Absorption (SF)
Niles (20%)
Skokie (17%)
A few new vacancies resulted in absorption
turning negative during the third quarter,
but occupancy remained steady
20 NAI Hiffman
North Cook
Quarter in Review
Absorption turned slightly negative during the third quarter in
the North Cook submarket due to limited transaction activity
and a few new vacancies being introduced, the largest of which
involved Crimson AV moving out of its 28,156 SF space at 18521854 Elmdale Ave in Glenview. Net absorption totaled negative
14,433 SF for the third quarter, and the vacancy rate remained
largely unchanged at 5.99%. This figure is still down 2.21% from
its peak during the second quarter of 2010.
Construction Deliveries
600,000
500,000
400,000
300,000
200,000
The North Cook submarket’s largest sale during the third
quarter belongs to global pharmaceutical and biotechnology
organization Wockhardt USA. The company purchased a 95,000
SF industrial facility at 8350 N Lehigh Ave in Morton Grove for
$7.64 million or roughly $81.00 PSF.
100,000
0
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
Blocks of Available Space
Leasing activity was limited to lease renewals under 20,000 SF in
the Niles and Morton Grove area and smaller new leases being
signed, including Quantum Graphics subleasing 30,059 SF at
6400-6430 W Howard St in Niles.
20,000-49,999
SF Available
50,000-99,999
SF Available
100,000-199,999
SF Available
200,000+
SF Available
Looking Forward
The North Cook vacancy rate continues to be one of the lowest
in the entire industrial market and is close to returning to levels
witnessed in 2008. Only eight blocks of contiguous space
100,000 SF or larger are available in the submarket, suggesting
that large swings in absorption are unlikely and mid-sized
transaction will be more common over the coming quarters. A
150,000 SF speculative facility is currently in the planning stages
in Niles as well as a planned FedEx distribution facility, which
will be biggest drivers of activity in the North Cook submarket
over the next several quarters. This will be the first significant
construction activity in the submarket in several years.
0
5
10
15
20
25
30
Largest Blocks of Available Space
Building Address
City
Block Size (SF)
5959 W Howard St
Niles
756,560
6900 Austin Ave
Niles
180,000
5990 W Touhy Ave
Niles
153,826
1234 Peterson Dr
Wheeling
147,000
3610 W Touhy Ave
Lincolnwood
138,655
3500 Oakton St
Skokie
133,923
3411 Woodhead Dr
Northbrook
117,000
Significant North Cook Sale Transactions
3rd Quarter 2013
Building Address
Size (SF)
Sale Price
Price PSF
Buyer
Seller
8350 N Lehigh Ave, Morton Grove
95,000
$7,647,500
$81
Wockhardt USA
Individual owner
Significant North Cook Lease Transactions
3rd Quarter 2013
Property Address
Leased (SF)
Tenant
Lease Type
6400-6430 W Howard St, Niles
30,059
Quantum Graphics
Sublease
7850 Lehigh Ave, Morton Grove
14,400
Undisclosed
New lease
6663 W Howard St, Niles
11,200
CrossFit Illumine LLC
New lease
Entries highlighted in red denote NAI Hiffman transactions
21
Barring
90
Hampshire
Fox Valley
East
Dundee
Hoffman
Estates
Elgin
90
Schaum
# INDUSTRIAL BUILDINGS
496
MARKET SIZE (SF)
32,378,205
TOTAL VACANCY
2,722,738 SF (8.41%)
DIRECT VACANCY
2,684,528 SF (8.29%)
SUBLEASE VACANCY
38,210 SF (0.12%)
Streamwood
South Elgin Bartlett
47
AVAILABLE SPACE
2,732,297 SF (8.44%)
3Q13 NET ABSORPTION (SF)
179,890
YTD 2013 NET ABSORPTION (SF)
448,677
UNDER CONSTRUCTION (SF)
0
3Q13 NEW SUPPLY (SF)
0
Bloomin
25
31
64
38
St Charles
Dupage
Airport
59
64
Geneva
West Chicago
38
Batavia
North Aurora
88
Naperville
Sugar Grove
Aurora
Montgomery
Vacancy Rate
Net Absorption
8.41%
179,890 SF
Asking Rents
Bolingb
55
Romeoville
Plainfield
The Fox Valley submarket lies between the I-90/Northwest submarket to the north and the I-88 Corridor submarket to the
south and has non-direct access to major expressways. It is primarily an owner/user market with leasing opportunities in
the small to mid-size range. The user base generally consists of manufacturing companies that serve the area within close
proximity to users’ homes. Much of the inventory is composed of mid-1980s buildings in contrast to the modern “big-box”
distribution warehouses of neighboring submarkets. However, there is land available for new state-of-the-art construction.
Many users choose to be in the Fox Valley submarket due to the need to remain in the submarket long-term because of the
proximity their labor pool and homes, resulting in limited transaction velocity.
Vacancy | Absorption
Inventory by City
15%
400,000
Geneva (12%)
240,000
West Chicago (35%)
10%
80,000
-80,000
5%
Batavia (25%)
-240,000
-400,000
‘08
2009
2010
2011
Vacancy Rate (%)
2012
2013
0%
Net Absorption (SF)
St. Charles (28%)
Demand has been positive and the
vacancy rate has been steadily
decreasing for the past two years
22 NAI Hiffman
Fox Valley
Quarter in Review
The Fox Valley submarket absorbed 179,890 SF of vacant space
during the third quarter, nearly matching its absorption tally for
the second quarter. This demand pushed the vacancy rate down
an additional 55 basis points to end the third quarter at 8.41%, a
rate 3.79% below the peak rate of 12.2% witnessed during the
third quarter of 2010.
Construction Deliveries
1,500,000
1,200,000
900,000
The largest lease of the third quarter was signed by Evansville,
Indiana-based Accuride Corporation Inc The manufacturer and
supplier of wheels, wheel-end components and other products
to the North American commercial vehicle industry will occupy
the entire 170,462 SF industrial building located at 950 N
Raddant Rd in Batavia.
600,000
300,000
0
2013
2012
2011
2010
2009
Blocks of Available Space
20,000-49,999
SF Available
50,000-99,999
SF Available
100,000-199,999
SF Available
No construction projects are underway in the Fox Valley
submarket and activity has been limited to building expansions
over the past few years.
200,000+
SF Available
0
5
10
15
20
25
30
Largest Blocks of Available Space
Looking Forward
Building Address
The Fox Valley submarket has witnessed improving conditions
for the past two years, as demand has been positive and the
vacancy rate has steadily decreased. This trend is expected to
continue, but few large contiguous blocks of space are currently
available, suggesting large swings in absorption and vacancy are
unlikely. Trends tend to be slow to develop in the area because
new tenants are rarely drawn to the submarket due to its landlocked location.
City
Block Size (SF)
1717 W Harvester Rd
West Chicago
465,940
3940-3950 Stern Ave
St. Charles
146,798
1601-1701 W Hawthorne Ln
West Chicago
102,000
1501 Indiana Ave
St. Charles
93,428
1400 Kingsland Dr
Batavia
92,309
506-530 Kingsland Dr
Batavia
83,200
2080 Gary Ln
Geneva
82,400
Significant Fox Valley Sale Transactions
Building Address
2008
2007
2006
2005
2004
2003
2002
2001
2000
Provider of high-quality reconditioned forklifts and scissor
lifts, Illinois Lift Equipment, Inc leased the 30,257 SF industrial
building located at 1201 W Hawthorne Ln in West Chicago. The
company will use the facility as its headquarters and showroom.
Size (SF)
3rd Quarter 2013
Sale Price
Price PSF
Buyer
Seller
None to report
Significant Fox Valley Lease Transactions
3rd Quarter 2013
Property Address
Leased (SF)
Tenant
Lease Type
950 N Raddant Rd, Batavia
170,462
Accuride Corporation Inc
New lease
1201 W Hawthorne Ln, West Chicago
30,257
Illinois Lift Equipment Inc
New lease
1185 Atlantic Dr, West Chicago
19,400
Undisclosed
New lease
23
e
Hoffman
Estates
Central DuPage
Mt. Prospect
Schaumburg
TOTAL VACANCY
3,796,672 SF (5.65%)
DIRECT VACANCY
3,656,395 SF (5.44%)
SUBLEASE VACANCY
140,277 SF (0.21%)
AVAILABLE SPACE
5,678,898 SF (8.45%)
3Q13 NET ABSORPTION (SF)
501,874
UNDER CONSTRUCTION (SF)
203,973
3Q13 NEW SUPPLY (SF)
156,820
19
20
67,232,050
969,733
Ohare
Int'l Airport
53
MARKET SIZE (SF)
YTD 2013 NET ABSORPTION (SF)
Elk Grove
Village
Bartlett
1,096
Des Plaines
290
Streamwood
# INDUSTRIAL BUILDINGS
294
Arlington
Heights
90
Wood Dale
Bloomingdale
ge
rt
Glendale
Heights
Carol
Stream
64
Frankli
Addison
Elmhurst
355
West Chicago
Melr
Par
83
Glen Ellyn
Lombard
88
294
Downers
Grove
88
La Gran
Naperville
Vacancy Rate
Net Absorption
Burr
Ridge
Asking Rents
Woodridge
5.65%
501,874 SF
The well-positioned Central DuPage submarket benefits from advantages including relatively low DuPage County taxes,
newer building inventory and an educated workforce. The completion of the I-355 extension, Chicago’s newest expressway,
has improved access to the area and spurred interest in the mature market. Users in the Central DuPage submarket vary by
type and are not limited to primarily distribution like other nearby submarkets, yet this market is centrally located and ideally
serves the Chicago Metropolitan Area. For all of these reasons, the area is favored by institutional ownership.
Vacancy | Absorption
Inventory by City
1,500,000
12%
1,000,000
10%
500,000
8%
0
6%
-500,000
4%
-1,000,000
‘08
2009
2010
2011
Vacancy Rate (%)
2012
2013
2%
Roselle, Bloomingdale,
Lombard, etc. (18%)
Carol Stream (28%)
Hanover Park (8%)
Elmhurst (9%)
Glendale Heights (10%)
Addison (27%)
Net Absorption (SF)
The vacancy rate dipped below 6% during
the third quarter, one of the lowest rates
the submarket has witnessed
24 NAI Hiffman
Central DuPage
Quarter in Review
The Central DuPage submarket absorbed 501,874 SF during the
third quarter, the highest quarterly tally in over a year. This activity
dropped the vacancy rate by 48 basis points to end the quarter
at 5.65%, a rate more than 4.8% below the peak vacancy rate
witnessed in late-2009.
Construction Deliveries
2.5 MM
2.0 MM
TA Associates Realty purchased the 515,497 SF building located
at 437-515 Tower Blvd in Carol Stream from LaSalle Investment
Management in September, the largest sale transaction of
the quarter. The largest lease involved metalworking and
maintenance, repair and operations supplies distributor MSC
Industrial Supply Co renewing its lease and expanding by
69,725 SF to occupy a total of 181,635 SF at 1575 Hunter Rd in
Hanover Park’s Hanover Corporate Center.
1.5 MM
1.0 MM
0.5 MM
0
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
Blocks of Available Space
A 90,203 SF speculative facility and a 66,617 SF build-to-suit
facility for document management solutions provider RhinoDox
were completed during the third quarter in Bartlett’s Brewster
Creek Business Park. In the same business park, construction
continues on a 64,192 SF speculative facility and ground was
broken during the third quarter on a 139,781 SF facility at 201
Gary Ave in Roselle’s Turnberry Lakes Business Park.
20,000-49,999
SF Available
50,000-99,999
SF Available
100,000-199,999
SF Available
200,000+
SF Available
0
10
20
30
40
50
60
Largest Blocks of Available Space
Looking Forward
The Central DuPage vacancy rate dipped below 6% during
the third quarter, one of the lowest rates the submarket has
historically witnessed. Only eight options for contiguous spaces
100,000 SF or larger are currently available in the submarket,
suggesting larger deals may go to the neighboring I-88 Corridor
or I-55 Corridor submarkets.
Building Address
City
Block Size (SF)
900-910 Kimberly Dr
Carol Stream
275,347
1820-1920 Internationale Blvd
Glendale Heights
259,625
180 Exchange Blvd
Glendale Heights
177,615
500 Regency Dr
Glendale Heights
160,660
200 Regency Dr
Glendale Heights
150,461
Significant Central DuPage Sale Transactions
3rd Quarter 2013
Building Address
Size (SF)
Sale Price
Price PSF
Buyer
Seller
437-515 Tower Blvd, Carol Stream
515,497
Undisclosed
Undisclosed
TA Associates Realty
LaSalle Investment Management
1111 N Ridge Ave, Lombard
65,000
$3,625,000
$56
United Delivery Service
ATI Capital
303 S Rohlwing Rd, Addison
64,755
$2,795,000
$43
Val-Matic Valve/The Key Group
Porter Pipe & Supply Co
945 N Larch Ave, Elmhurst
51,023
$2,725,000
$53
Alliance Hose & Rubber Co
GIS Rolling, LLC
100 High Grove Blvd, Glendale Heights
42,136
$2,300,000
$55
M-Wave
Mitsui Plastics Inc
Significant Central DuPage Lease Transactions
3rd Quarter 2013
Property Address
Leased (SF)
Tenant
Lease Type
1575 Hunter Rd, Hanover Park
181,635
MSC Industrial Supply Co
Lease expansion/renewal
115-175 Della Ct, Carol Stream
134,758
FedEx
Lease expansion
250 Kehoe Blvd, Carol Stream
112,110
Multitech Industries
New lease
1688 Glen Ellyn Rd, Glendale Heights
84,804
KKSP (K&K Screw)
New lease
138-158 Alexandra Way, Carol Stream
53,463
ConAgra Foods
Lease expansion
141-171 Internationale Blvd, Glendale Heights
36,858
Undisclosed
New lease
115 W Lake Dr, Glendale Heights
35,659
Undisclosed
New lease
Entries highlighted in red denote NAI Hiffman transactions
25
Chicago
Executive
Airport
Palatine
O’Hare
90
# INDUSTRIAL BUILDINGS
1,718
MARKET SIZE (SF)
99,904,689
TOTAL VACANCY
7,096,236 SF (7.10%)
DIRECT VACANCY
6,770,775 SF (6.78%)
SUBLEASE VACANCY
325,481 SF (0.33%)
AVAILABLE SPACE
10,431,166 SF (10.44%)
502,609
YTD 2013 NET ABSORPTION (SF)
1,924,538
UNDER CONSTRUCTION (SF)
570,498
3Q13 NEW SUPPLY (SF)
0
Schaumburg
Net Absorption
7.10%
502,609 SF
Des Plaines
72
290
N
45
Elk Grove
Village
Ohare
Int'l Airport
Itasca
83
Wood Dale
19
Bensenville
Franklin Park
Elmhurst
355
Vacancy Rate
Morton
Grove
Mt. Prospect
loomingdale
3Q13 NET ABSORPTION (SF)
294
Arlington
Heights
Melrose
Park
Asking Rents
88
294
The O’Hare submarket is unique due to its close proximity to O’Hare International Airport and its central location at the
crossroads of Chicago’s expressway system. The O’Hare submarket holds the most industrial inventory of all of the
Chicagoland submarkets. Elk Grove Village alone is the nation’s largest industrial park, boasting more than 40 million SF of
industrial and flex space. New, state-of-the-art facilities are being built as older, obsolete structures are being torn down in the
O’Hare submarket, as construction activity starts to pick up again. The demand for state of the art facilities is driven by the
massive modernization program that serves to increase airport capacity by 60% and decrease delays by 70%. This program
is slated for completion in 2020 at a cost of $15 billion. Currently O’Hare International Airport is ranked 6th in the country and
17th in the world with respect to total tonnage of air cargo which passes through each year. The city is forecasting that the
airport modernization will boost Chicago’s ranking with respect to air cargo tonnage. Developers are aggressively seeking
large land sites in advance for this increase in cargo capacity.
Vacancy | Absorption
Inventory by City
900,000
14%
300,000
12%
-300,000
10%
-900,000
8%
Wood Dale (9%)
Rosemont (1%)
Itasca (11%)
Elk Grove Village (42%)
Bensenville (18%)
-1,500,000
‘08
2009
2010
2011
Vacancy Rate (%)
2012
2013
6%
Net Absorption (SF)
Des Plaines (18%)
More than 2.7 million SF of vacant space
has been absorbed over the past 12
months, pushing vacancy down by 2.8%
26 NAI Hiffman
O’Hare
Quarter in Review
Over the past year, the O’Hare submarket has witnessed a surge
of activity, as more than 2.7 million SF of vacant space has been
absorbed, pushing the vacancy rate down by 2.8% to finish the
third quarter at 7.1%. During the third quarter alone, 502,609 SF
of vacant space was absorbed.
1,000,000
800,000
600,000
400,000
200,000
0
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
The largest sale of the third quarter involved post-production
services provider Specialty Finishing Group buying the 140,698
SF building located at 1401 Kirk St in Elk Grove Village from
Prologis for $5 million. The company moved from a smaller
building, selling its 59,960 SF facility at 1100 Touhy Ave in Elk
Grove Village for $2.75 million. The largest new lease of the
quarter involved full-service freight company Basic Enterprises
Inc leasing the 101,558 SF building at 2521-2567 Greenleaf Ave
in Elk Grove Village. The building was completely renovated in
the spring of this year that included a new facade, new offices
and the addition of 13 exterior docks.
Construction Deliveries
1,200,000
Blocks of Available Space
20,000-49,999
SF Available
50,000-99,999
SF Available
Construction continues on four new speculative projects in Elk
Grove Village ranging in size from 87,836 SF to 208,302 SF for a
total of 570,498 SF currently under construction.
100,000-199,999
SF Available
200,000+
SF Available
0
Looking Forward
The accelerated transaction activity witnessed in the O’Hare
submarket during the past four quarters should slow a bit during
the coming quarters, but the trend should remain positive, as
30 options for contiguous space 100,000 SF or larger remain
available in the submarket, suggesting that significant absorption
is still a possibility as tenants look to take advantage of the
market perks the O’Hare submarket offers.
20
40
60
80
100
Largest Blocks of Available Space
Building Address
City
Block Size (SF)
1010 Foster Ave
Bensenville
306,918
777 Mark St
Wood Dale
234,000
855 N Wood Dale Rd
Wood Dale
231,679
1925 Busse Rd
Elk Grove Village
208,406
950-990 Supreme Dr
Bensenville
201,011
Significant O’Hare Sale Transactions
3rd Quarter 2013
Building Address
Size (SF)
Sale Price
Price PSF
Buyer
Seller
1401 Kirk St, Elk Grove Village
140,698
$5,000,000
$36
Specialty Finishing Group
Prologis, Inc
921-925 Ardmore Ave, Itasca
116,880
$4,615,000
$39
Platinum Converting
Prologis, Inc
170-176 Mittel Dr, Wood Dale
98,500
$5,400,000
$55
C. Cretors & Company
Deutsche Bank/RREEF America
1099 Greenleaf Ave, Elk Grove Village
78,007
$3,225,000
$41
Greenleaf Lively Properties, LLC
1099 Greenleaf General Partnership
2601 Lively Blvd, Elk Grove Village
75,072
$3,650,000
$49
E.J. Welch Company, Inc
Prologis, Inc
1100 Touhy Ave, Elk Grove Village
59,960
$2,750,000
$46
Steiner Electric Company
Specialty Finishing Group
Significant O’Hare Lease Transactions
3rd Quarter 2013
Property Address
Leased (SF)
Tenant
Lease Type
2521-2567 Greenleaf Ave, Elk Grove Village
101,558
Basic Enterprises Inc
New lease
2801-2881 S Busse Rd, Elk Grove Village
79,000
CED
New lease
805 Mark St, Elk Grove Village
53,437
American Olean Midwest
Lease renewal
2000 Arthur Ave, Elk Grove Village
45,101
Dachser
New lease
1101-1117 N Ellis St, Bensenville
43,058
Fidelitone
Lease renewal
1850 Arthur Ave, Elk Grove Village
40,320
MJM Logistics
New lease
10 W Gateway Rd, Bensenville
38,820
Dunwell Packaging
New lease
Entries highlighted in red denote NAI Hiffman transactions
27
ights
Morton
Grove
Mt. Prospect
94
West Cook
Des Plaines
Niles
Skokie
lk Grove
Village
Lincolnwo
Ohare
Int'l Airport
# INDUSTRIAL BUILDINGS
732
MARKET SIZE (SF)
59,486,743
TOTAL VACANCY
4,628,587 SF (7.78%)
DIRECT VACANCY
4,628,587 SF (7.78%)
SUBLEASE VACANCY
0 SF (0.0%)
AVAILABLE SPACE
6,255,528 SF (10.52%)
3Q13 NET ABSORPTION (SF)
2,885
YTD 2013 NET ABSORPTION (SF)
312,785
UNDER CONSTRUCTION (SF)
0
3Q13 NEW SUPPLY (SF)
0
Dale
Schiller
Park 19
90
94
Franklin Park
45
43
64
Elmhurst
20
Melrose
Park
Oak Park
88
290
Cicero
294
Vacancy Rate
Net Absorption
55
Asking Rents
La Grange
7.78%
2,885 SF
Chicago Midway
Airport
Burr
The West Cook submarket draws companies from the City of Chicago looking for a more functional building and additional
amenities compared to the aging, often obsolete inventory of properties in Chicago. Additionally, companies migrate to the
area from the nearby O’Hare submarket where interstate and airport access is similar, but rental rates tend to be higher. The
West Cook submarket benefits from good access to the City of Chicago, close proximity to area interstates and rail providers
and relatively low rental rates. It is primarily an owner/user market, but leasing opportunities have increased as institutional
and private owners have entered the submarket.
Vacancy | Absorption
Inventory by City
1,000,000
15%
600,000
13%
200,000
11%
-200,000
9%
-600,000
7%
Hillside, River Grove,
Maywood, etc. (12%)
Berkeley (5%)
Franklin Park (35%)
Schiller Park (8%)
-1,000,000
‘08
2009
2010
2011
Vacancy Rate (%)
2012
2013
Bellwood (9%)
5%
Net Absorption (SF)
Melrose Park (31%)
Conditions were relatively flat during the
third quarter, but remain positive for the
year, with 312,785 SF absorbed
28 NAI Hiffman
West Cook
Quarter in Review
Conditions were relatively flat in the West Cook submarket
during the third quarter. Continued transaction velocity was offset
by the effect of new vacancies being introduced to the market,
resulting in net absorption totaling only 2,885 SF for the quarter.
However, the tally for the year remains strong, with 312,785 SF
of vacant space being absorbed during the first three quarters of
2013. The vacancy rate was unchanged this quarter at 7.78%.
Construction Deliveries
1,500,000
1,200,000
900,000
600,000
The largest sale transaction of the quarter involved Provision
Equity LLC buying the 33,360 SF industrial warehouse located at
3524-3528 Martens St in Franklin Park. Metro Air Service signed
the largest lease of the quarter, taking the entire 88,060 SF
distribution facility located at 11501 W Irving Park Rd in Franklin
Park. Direct to consumer merchandising company Winston
Brands, Inc extended its lease in 470,000 SF at 4700 Proviso Dr
in Melrose Park.
300,000
0
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
Blocks of Available Space
20,000-49,999
SF Available
50,000-99,999
SF Available
Construction remains at a stand-still as there are few
opportunities for new construction in the area. The former
Central Grocers site, a 24.8 acre parcel, is still awaiting a buildto-suit opportunity and can accommodate a building up to
700,000 SF in size.
100,000-199,999
SF Available
200,000+
SF Available
0
10
20
30
40
50
Largest Blocks of Available Space
Looking Forward
Building Address
Following a two-and-a-half year decline, the West Cook
submarket vacancy rate has leveled off during the past two
quarters. However, 15 contiguous blocks of space over 100,000
SF are currently available, suggesting that significant absorption
is still a possibility over the coming quarters.
City
Block Size (SF)
400 N Wolf Rd
Northlake
559,103
2721-2727 Edgington St
Franklin Park
487,700
5300 Saint Charles Rd
Berkeley
468,734
2233 West St
River Grove
408,688
3501 Mount Prospect Rd
Franklin Park
362,080
2100 N 15th Ave
Melrose Park
300,000
2701 Washington Blvd
Bellwood
300,000
Significant West Cook Sale Transactions
3rd Quarter 2013
Building Address
Size (SF) Sale Price
Price PSF
Buyer
Seller
3524-3528 Martens St, Franklin Park
33,360
Undisclosed
Provision Equity LLC
Martens Street LLC
Undisclosed
2158 West St, River Grove
20,000
$1,066,000*
$53*
Interstate Brands Corp
Hostess Brands, Inc
245 Fencl Ln, Hillside
19,090
$750,000
$39
Central States Joint Board-AFL-CIO
Walker Partners, LLC
Significant West Cook Lease Transactions
3rd Quarter 2013
Property Address
Leased (SF)
Tenant
Lease Type
4700 Proviso Dr, Melrose Park
470,000
Winston Brands, Inc
Lease renewal
2407-2457 W North Ave, Melrose Park
248,912
DesignPac
Lease renewal
11501 W Irving Park Rd, Franklin Park
88,060
Metro Air Service
New lease
9400 W King St, Franklin Park
33,858
Duray Manufacturing Inc
New lease
11101 Franklin Ave, Franklin Park
27,000
Ryder Logistics
New lease
11101 Franklin Ave, Franklin Park
17,450
Noel Transportation
New lease
*Part of a 39-property national portfolio sold for a total of $360 million
Entries highlighted in red denote NAI Hiffman transactions
29
p
294
gton
hts
Morton
Grove
Mt. Prospect
Des Plaines
Chicago
Grove
lage
Niles
2,796
MARKET SIZE (SF)
213,282,640
TOTAL VACANCY
18,017,140 SF (8.45%)
DIRECT VACANCY
17,467,200 SF (8.19%)
SUBLEASE VACANCY
549,940 SF (0.26%)
AVAILABLE SPACE
22,625,083 SF (10.61%)
3Q13 NET ABSORPTION (SF)
105,267
YTD 2013 NET ABSORPTION (SF)
252,668
UNDER CONSTRUCTION (SF)
35,000
3Q13 NEW SUPPLY (SF)
0
Skokie
Ohare
Int'l Airport
41
Dale
# INDUSTRIAL BUILDINGS
Evanston
94
Chicago North
50
294 Franklin Park
mhurst
Melrose
Park
88
90
64
Oak Park
290
Cicero
55
La Grange
41
Chicago Midway
Airport
Burr
Ridge
Bedford Park
Net Absorption
Chicago
South
Bridgeview
12 20
90
57
294 Alsip
Palos
Heights
Vacancy Rate
41
94
94
Blue Island
Gary/Ch
Asking Rents
South
Holland
Tinley Park
8.45%
105,267 SF
80
Hammond
80
57
Mokena
Chi
Chicago proper is by far the largest submarket in terms of total square feet and number of buildings. While the industrial
base is geographically diverse, much of the modern development in recent years has taken place in neighborhoods close to
downtown, such as Pilsen/Bronzeville (Near South), Kinzie Corridor/Avondale (Near North), and Back of the Yards/Crawford
(Near Southwest). There are several planned industrial developments in these neighborhoods; the industrial projects compete
with residential and retail more than in any other submarket. In addition, the West Loop/Fulton Market District has seen a lot
of interest lately especially for redevelopment projects. This competition translates into higher land values, which ultimately
causes the rental rates and sales prices to be higher. Companies that place a premium on proximity to end-users will gladly
pay these higher real estate expenses. There are still many industrial companies that operate in less-functional buildings,
but make the trade-off for a readily available labor pool. Since 1987, the City of Chicago has seen a slowing of the erosion
of its industrial base, through the creation of Planned
Vacancy | Absorption
Manufacturing Districts (PMDs). These PMDs make it
11%
2 MM
nearly impossible to change the zoning, which has kept the
underlying cost of industrial land low; however some firms
10%
1 MM
have recently challenged these PMDs, and if successful,
could alter Chicago’s industrial landscape.
0
9%
-1 MM
8%
-2 MM
7%
-3 MM
‘08
2009
2010
2011
Vacancy Rate (%)
2012
2013
6%
Net Absorption (SF)
The first three quarters of 2013 have
witnessed 252,668 SF of vacant space
absorbed, the most in more than 5 years
30 NAI Hiffman
Chicago
Quarter in Review
Absorption was positive in the city for the third consecutive
quarter, totaling 105,267 SF for the three month period, bringing
the 2013 tally to 252,668 SF year-to-date. The vacancy rate
decreased only seven basis points during the third quarter to
8.45%, a figure still above pre-recession lows, but well below the
9.68% rate recorded in mid-2010.
1,000,000
500,000
0
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
Peak Construction started on New World Van Lines 35,000 SF
building addition at 5875-5879 N Rogers Ave. Development in
the city will remain limited given the lack of space available, aside
from building expansions, redevelopments and any specialty
construction projects.
1,500,000
2000
Lincolnshire-based Venture One Real Estate, LLC, in partnership
with New York-based DRA Advisors, purchased the vacant
312,154 SF facility at 2801 S Western Ave and plan to fully
renovate the property. The two largest leases signed during the
third quarter were both renewals. Rudd Container Corporation
renewed its 101,860 SF space at 4600 S Kolin Ave, and MWD
Logistics renewed its 90,624 SF lease at 1500 E 97th St. One of
the largest new leases signed during the third quarter involved
wholesale foodservice distributor Cristina Foods leasing 28,268
SF at 4124 S Racine Ave.
Construction Deliveries
2,000,000
Blocks of Available Space
20,000-49,999
SF Available
50,000-99,999
SF Available
100,000-199,999
SF Available
200,000+
SF Available
0
50
100
150
200
Largest Blocks of Available Space
Looking Forward
Building Address
City
Block Size (SF)
The industrial parts of Chicago offer a unique product to a
select set of users that prefer to call the city home. More than
50 contiguous blocks of space 100,000 SF or larger remain
available. The city’s conditions don’t always correlate with the
trends of the overall market and the vacancy rate is expected to
remain variable as new tenants move in while others leave.
4000 W Diversey Ave
Chicago
1,449,000
2600 W 35th St
Chicago
647,800
3101 S Kedzie Ave
Chicago
501,675
4800 W Roosevelt Rd
Chicago
358,526
3737-3757 S Ashland Ave
Chicago
347,460
Significant Chicago Sale Transactions
3rd Quarter 2013
Building Address
Size (SF) Sale Price
Price PSF
Buyer
Seller
2801 S Western Ave
312,154
$20
Venture One Real Estate/DRA Advisors LLC
Friedman Realty LLC
$6,211,500
2635 S Western Ave & 2658 S Leavitt St 306,797
$34,000,000 $111
Bridge Development Partners/Hunt Realty Investments
Gearing Stone
2845 W 48th Pl
153,410
$2,500,000
$16
Private investor
Westex, Inc
3251 & 3269 N California Ave
82,405
$7,500,000
$91
WMS Industries, Inc
C. Cretors & Co
210-212 N Green St
83,000
$6,825,000* $82*
Shorenstein Properties/WeWork/AJ Capital Partners
Amity Packing Co, Inc
1501 S Blue Island Ave
34,269
$3,100,000
Marquez Investment Group LLC
Testa Properties LLC
$90
Significant Chicago Lease Transactions
3rd Quarter 2013
Property Address
Leased (SF)
Tenant
Lease Type
4600 S Kolin Ave
101,860
Rudd Container Corporation
Lease renewal
1500 E 97th St
90,624
MWD Logistics
Lease renewal
4100 W 76th St
47,063
Undisclosed
New lease
4200 W Wrightwood Ave
37,000
Sharprint
Lease renewal
4124 S Racine Ave
28,268
Cristina Foods
New lease
1801 W Foster Ave
19,058
Empirical Brewery
New lease
*Redevelopment sale - purchases plans to redevelop property into mixed-use commercial property
Entries highlighted in red denote NAI Hiffman transactions
31
Barrington
90
Chicago
Executiv
Airpo
Palatine
Hampshire
East
Dundee
Arlington
Heights
Hoffman 90
Mt. Pro
Estates
Elgin
Des Pl
Schaumburg
290
Streamwood
Elk Grove
South ElginBartlett
Village
Ohar
I-88 Corridor
Int'l Air
Bloomingdale Wood Dale
# INDUSTRIAL BUILDINGS
773
MARKET SIZE (SF)
62,092,314
4,446,418 SF (7.16%)
DIRECT VACANCY
4,111,077 SF (6.62%)
AVAILABLE SPACE
5,122,088 SF (8.25%)
3Q13 NET ABSORPTION (SF)
281,807
YTD 2013 NET ABSORPTION (SF)
443,481
UNDER CONSTRUCTION (SF)
350,000
Elmhurst
West Chicago
Batavia
88
56
56
North Aurora
335,341 SF (0.55%)
3Q13 NEW SUPPLY (SF)
355
Geneva
TOTAL VACANCY
SUBLEASE VACANCY
294Fr
Dupage
St CharlesAirport
59
31
Naperville
53
25
Sugar Grove
Aurora
30
83
Downers
Grove
88
L
Burr
Ridge
34
Montgomery
Bolingbrook
Lemont
55
Romeoville
Plainfield
80,000
355
80
Vacancy Rate
Net Absorption
7.16%
281,807 SF
Shorewood
Asking Rents
Joliet
Minooka
80
Elwood
The I-88 Corridor industrial submarket saw increased tenant and speculative developer demand due to the lack of available
land in neighboring submarkets such as Central DuPage. Developers were drawn to the number of larger sized land sites for
multi-building developments and easy access to major expressways that the I-88 submarket has to offer. With limited options
for “in fill” development opportunities in Central DuPage and I-55 submarkets the I-88 submarket has become an area of
demand for the last twelve months.
Vacancy | Absorption
Inventory by City
1,000,000
15%
600,000
13%
300,000
11%
0
Downers Grove (7%)
Aurora (43%)
9%
-300,000
7%
-600,000
-1,000,000
Oswego, Lisle, North Aurora,
Westmont, etc. (13%)
Montgomery (15%)
‘08
2009
2010
2011
Vacancy Rate (%)
2012
2013
5%
Net Absorption (SF)
Naperville (18%)
Absorption turned positive again during
the third quarter, following a brief setback
during the second quarter
32 NAI Hiffman
Mo
I-88 Corridor
Quarter in Review
Following a brief setback during the second quarter when new
vacancies outpaced the effects of continued leasing activity,
positive absorption returned to the I-88 Corridor during the third
quarter as 281,807 SF of vacant space was absorbed. The
area’s vacancy rate decreased 34 basis points to 7.16%, nearly
half of its 14.17% peak recorded at the end of 2009.
Construction Deliveries
2.5 MM
2 MM
1.5 MM
Oakbrook Terrace-based ARCO/Murray purchased the 53,977
SF flex building at 3110 Woodcreek Dr in Downers Grove in
July for their new Chicago headquarters facility. The company
paid $1.97 million, or about $37.00 PSF. The largest new lease
transaction of the third quarter involved JBS Logistics leasing
60,000 SF in the 120,200 SF building located at 2300 N
Raddant Rd in Aurora’s Farnsworth International Business Park.
1 MM
0.5 MM
0
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
Blocks of Available Space
An 80,000 SF build-to-suit facility for Supermax was completed
during the third quarter in the Prime Aurora Business Park. The
only ongoing construction project is a 350,000 SF build-to-suit
building for Ozark Automotive Distributors, Inc at 543 Frontenac
Ct in Naperville. The building is scheduled for completion during
the second quarter of 2014.
20,000-49,999
SF Available
50,000-99,999
SF Available
100,000-199,999
SF Available
200,000+
SF Available
0
Looking Forward
The I-88 Corridor submarket was one of the first in Chicago’s
industrial market to recover. The vacancy rate has stabilized over
the past few quarters between 7% and 8%. Only seven options
for contiguous blocks of space 100,000 SF or larger remain,
suggesting that large swings in absorption or vacancy are
unlikely over the coming quarters.
10
20
30
40
50
Largest Blocks of Available Space
Building Address
City
Block Size (SF)
2413 Prospect Dr
Aurora
320,047
2001-2051 Baseline Rd
Montgomery
295,620
1203 Bilter Rd
Aurora
295,000
2580 Prospect Ct
Aurora
240,000
631 W Park Ave
Aurora
200,000
Significant I-88 Corridor Sale Transactions
3rd Quarter 2013
Building Address
Size (SF)
Sale Price
Price PSF
Buyer
Seller
3110 Woodcreek Dr, Downers Grove
53,977
$1,970,000
$37
ARCO/Murray
SA Challenger, Inc
1960 Bighorn Rd, Naperville
50,000
Undisclosed*
Undisclosed*
LSC Development, LLC
Packer Engineering, Inc
1851 Albright Rd, Montgomery
27,075
$1,800,000
$66
Fletcher Smith
1851 Albright Partners LLC
535 Exchange Ct, Aurora
25,943
$1,264,910
$49
State Mechanical Services, LLC
Duke Realty Corporation
Significant I-88 Corridor Lease Transactions
3rd Quarter 2013
Property Address
Leased (SF)
Tenant
Lease Type
2300 N Raddant Rd, Aurora
60,000
JBS Logistics
New lease
3565 Butterfield Rd, Aurora
29,872
Victory Packaging
New lease
4995 Varsity Dr, Lisle
19,918
Governmental Business Systems
New lease
2019 Corporate Ln, Naperville
15,107
Rooftop Solutions
New lease
740 Front St, Lisle
6,800
ClaySpace NFP
New lease
1600 Shore Rd, Naperville
4,148
Quality Measurement Solutions
New lease
1600 Shore Rd, Naperville
4,125
Martam Construction, Inc
New lease
*Part of a multi-property sale that included an office building and vacant land for $3,050,000
Entries highlighted in red denote NAI Hiffman transactions
33
F
Dupage
Airport
les
Elmhurst
355
a
West Chicago
I-55 Corridor
88
294
# INDUSTRIAL BUILDINGS
659
MARKET SIZE (SF)
81,708,730
TOTAL VACANCY
5,154,813 SF (6.31%)
DIRECT VACANCY
4,705,960 SF (5.76%)
SUBLEASE VACANCY
448,853 SF (0.55%)
AVAILABLE SPACE
10,140,428 SF (12.41%)
3Q13 NET ABSORPTION (SF)
-395,162
YTD 2013 NET ABSORPTION (SF)
1,446,506
UNDER CONSTRUCTION (SF)
1,013,528
3Q13 NEW SUPPLY (SF)
238,000
ra
Downers
Grove
88
Burr
Ridge
Woodridge
53
Bolingbrook
59
Lemont
30
55
Romeoville
Plainfield
171
Vacancy Rate
Net Absorption
6.31%
-395,162 SF
L
Naperville
355
Asking Rents
80
Shorewood
Mok
Joliet
The I-55 Corridor is one of the most desirable regional distribution submarkets due to its location close to cross-country
interstates I-55 and I-80, its proximity to Chicago’s consumers and labor market and its newer, modern warehouse buildings.
As a result, the I-55 Corridor has seen the highest level of development, leasing and sales activity over the past several years
and has been the focus of many institutional buyers. Given the desirability of this submarket, most of the larger sites have
been developed and there are limited sites available for development.
Vacancy | Absorption
Inventory by City
1.8 MM
15%
1.2 MM
12%
Forest View, Burr Ridge, Willowbrook, Darien (9%)
Lemont (4%)
Plainfield (4%)
Bolingbrook (36%)
0.6 MM
9%
0
6%
-0.6 MM
‘08
2009
2010
2011
Vacancy Rate (%)
2012
2013
Woodridge (12%)
3%
Net Absorption (SF)
Romeoville (35%)
Several new vacancies pushed net absorption
negative during the third quarter for the only
the third quarter in the past three years
34 NAI Hiffman
I-55 Corridor
Quarter in Review
Following the absorption of more than 1.8 million SF of vacant
space during the first half of the year, net absorption turned
negative during the third quarter for only the third time in the
past 12 quarters. This was due to the departure of tenants, the
largest of which was Sharp Electronics moving out of its 643,617
SF facility in Romeoville. Similarly, LG Electronics moved out of
198,731 SF in Romeoville and Personal Creations moved out
of 180,863 SF in Lemont, leaving significant new vacancies in
their wake. Net absorption for the third quarter totaled negative
395,162 SF, pushing the vacancy rate up 76 basis points to end
the quarter at 6.31%.
Construction Deliveries
10 MM
8 MM
6 MM
4 MM
2 MM
0
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
Despite these new vacancies coming to the market, transaction
activity remained strong. The largest sale of the quarter involved
Exeter Property Group buying the 579,900 SF building that is
fully-leased to Sony Entertainment located at 333 Gibraltar Dr
in Bolingbrook for $26,050,000. The largest new lease signed
during the third quarter involved paint company Valspar Corp
taking 400,856 SF in the recently constructed speculative
building at 1160 W Crossroads Pkwy in Romeoville.
Blocks of Available Space
20,000-49,999
SF Available
50,000-99,999
SF Available
100,000-199,999
SF Available
200,000+
SF Available
Looking Forward
0
Ground was broken on a 602,600 SF speculative facility in the
Bolingbrook Corporate Center West III business park. Three
additional speculative facilities are under construction, including
two 115,224 SF buildings in Bolingbrook and a 180,480 SF
building in Woodridge’s Park 355. Two buildings are set to break
ground during the beginning of the fourth quarter; an 898,560 SF
speculative facility for Pactiv Corp and a 672,080 SF speculative
facility, both in Romeoville's Pinnacle Business Center.
5
10
15
20
25
30
35
Largest Blocks of Available Space
Building Address
City
901 Carlow Dr
Bolingbrook
747,152
1070 Windham Pky
Romeoville
723,291
1450 Remington Blvd
Bolingbrook
650,494
1300 Naperville Dr
Romeoville
643,617
815 Bluff Rd
Romeoville
490,420
Significant I-55 Corridor Sale Transactions
Block Size (SF)
3rd Quarter 2013
Building Address
Size (SF)
Sale Price
Price PSF
Buyer
Seller
333 Gibraltar Dr, Bolingbrook
579,900
$26,050,000
$45
Exeter Property Group
TA Associates Realty
Significant I-55 Corridor Lease Transactions
3rd Quarter 2013
Property Address
Leased (SF)
Tenant
Lease Type
1160 W Crossroads Pky, Romeoville
400,856
Valspar Corp
New lease
389-501 Frontage Rd, Bolingbrook
217,023
Data Services Solutions, Inc
Lease renewal/expansion
1075 W Taylor Rd, Romeoville
184,057
Exel Logistics
Lease renewal/expansion
3-7 Timber Ct, Bolingbrook
164,600
CHEP USA
Lease renewal
1533 Davey Rd, Woodridge
114,591
Champion Packaging
New lease
901 W Crossroads Pky, Romeoville
100,792
MRC Polymers
New lease
860-868 W Crossroads Pky, Romeoville
94,584
LeSaint Logistics
Lease renewal/expansion
1000 Davey Rd, Woodridge
79,102
Paramont EO
New lease
905 Carlow Dr, Bolingbrook
52,565
Hagemeyer North America
Lease renewal
Entries highlighted in red denote NAI Hiffman transactions
35
294 Franklin Park
90
94
Elmhurst
355
South Cook
290
Chicago
Cicero
Downers
Grove
55
La Grange
Chicago Midway
Airport
1,125
MARKET SIZE (SF)
85,311,064
TOTAL VACANCY
7,484,788 SF (8.77%)
DIRECT VACANCY
7,328,272 SF (8.59%)
Burr
Ridge
Bedford Park
Bridgeview
156,516 SF (0.18%)
AVAILABLE SPACE
9,337,725 SF (10.95%)
3Q13 NET ABSORPTION (SF)
116,510
YTD 2013 NET ABSORPTION (SF)
563,161
UNDER CONSTRUCTION (SF)
36,000
3Q13 NEW SUPPLY (SF)
Oak Park
88
# INDUSTRIAL BUILDINGS
SUBLEASE VACANCY
Melrose
Park
20
12
ok
83
43
Lemont
45
Palos
Heights
50
90
57
294 Alsip
94
Blue Island
7
355
6
South
Holland
Tinley Park
80
Mokena
0
1
Chicago
Heights
Ham
394
57
Matteson
80
30
Net Absorption
8.77%
116,510 SF
Asking Rents
Illinois
Vacancy Rate
Monee
South Cook is the third largest submarket in Chicago by both square feet and number of buildings. The prominence of
this submarket hasn’t translated into heavy transaction velocity, however, as high-growth distribution firms have tended to
focus their expansion in the collar counties (with their lower property tax rates) to the south and west. A significant portion of
South Cook’s industrial base is manufacturing-oriented, so the buildings tend to be older and designed for production, not
distribution. Many of the communities are considered in-fill, meaning vacant land sites are rare, with buildings needing to be
torn down to accommodate new development. Ownership is mixed, including institutional, owner/user and both national and
local private owners. The bright spots for the submarket remain the proximity to skilled labor, and the access to a multitude
of expressways, rail lines, and public transportation. Towns like Bedford Park, Alsip, and Bridgeview continue to compete for
tenants, in large part due to their excellent transportation infrastructure.
Vacancy | Absorption
Inventory by City
15%
2 MM
13%
1 MM
All Other South Cook
Communities (35%)
Bedford Park (26%)
11%
0
9%
-1 MM
7%
Alsip (15%)
-2 MM
‘08
2009
2010
2011
Vacancy Rate (%)
2012
2013
5%
Net Absorption (SF)
Harvey (5%)
Bridgeview (8%)
Chicago Heights (11%)
Nearly 3.9 million SF of vacancy space has
been absorbed since 2009, pushing the
vacancy rate down by more than 4.8%
36 NAI Hiffman
Indiana
Park Forest
South Cook
Quarter in Review
The South Cook vacancy rate dropped by 81 basis points during
the third quarter, as 116,510 SF of vacant space was absorbed
through leasing activity and user sales. The vacancy rate
dropped to 8.77%, nearly two percentage points below the rate
recorded a year ago and more than 4.8% below the 13.6% peak
recorded in early 2009.
Construction Deliveries
2.5 MM
2.0 MM
1.5 MM
0.5 MM
0
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
The only ongoing construction project is a 36,000 SF build-tosuit facility for Intermodal Maintenance Group that broke ground
in Bedford Park during the third quarter.
1.0 MM
2000
The largest sale transaction of the third quarter involved
Warehouse Specialists, Inc buying the 496,260 SF industrial
building at 21751 Jason Rasmussen Dr in Sauk Village for
about $31 PSF. The 3PL supply chain solutions provider,
headquartered in Appleton, Wisconsin, will relocate its
operations from a 594,082 SF facility within the park located at
21700 Mark Collins Dr. The largest new lease signed during the
third quarter involved logistics company Jacobson Warehouse
leasing 202,902 SF at 16750 Vincennes Rd in South Holland.
Blocks of Available Space
20,000-49,999
SF Available
50,000-99,999
SF Available
100,000-199,999
SF Available
200,000+
SF Available
Looking Forward
0
The recovery continues in the South Cook submarket with the
vacancy rate dropping below its pre-recession levels and nearly
3.9 million SF absorbed since 2009. However, this recovery has
taken place among the submarket’s more modern and desirable
facilities. Many of the older, non-functional buildings with the
South Cook submarket will continue to experience pressure on
values and lease rates.
10
20
30
40
50
Largest Blocks of Available Space
Building Address
City
21700 Mark Collins Dr
Sauk Village
594,082
6501 W 65th St
Bedford Park
462,000
13144 S Pulaski Rd
Alsip
370,705
6901 W 65th St
Bedford Park
320,000
5139 W 73rd St
Bedford Park
270,789
21800 S Cicero Ave
Matteson
250,000
Significant South Cook Sale Transactions
Block Size (SF)
3rd Quarter 2013
Building Address
Size (SF)
Sale Price
Price PSF
Buyer
Seller
21751 Jason Rasmussen Dr, Sauk Village
496,260
$15,384,500
$31
Warehouse Specialists, Inc
Dermody Properties, Inc
7171 W 65th St, Bedford Park
113,634
$2,000,000
$18
Sterling Spring Company
Superior Manufacturing Group, Inc
Significant South Cook Lease Transactions
3rd Quarter 2013
Property Address
Leased (SF)
Tenant
Lease Type
16750 Vincennes Rd, South Holland
202,902
Jacobson Warehouse
New lease
7770 W 71st St, Bridgeview
166,663
Menasha Packaging Company, LLC
New lease
6755 W 65th St, Bedford Park
65,347
FAMSA Inc
New lease
12500-12520 S Lombard Ln, Alsip
40,867
Savers, Inc
New lease
6755 W 65th St, Bedford Park
21,363
Leggett & Platt Fashion Bed
Lease expansion
*Part of a national 31-property partial interest buyout for a published price of $247,837,000
Entries highlighted in red denote NAI Hiffman transactions
37
90
Cherry
Valley
Forest
Lake Zurich
Palatine
Hampshire
I-80/Joliet Corridor
Buffalo Highland
Park
Grove
Elgin
South Elgin
Chicago
Executive
Airport
Arlington 294
90
Heights
E
94
Schaumburg
Niles
Elk Grove
Village
Ohare
Int'l Airport
DeKalb
Dupage
Airport
St Charles
West Chicago
Batavia
# INDUSTRIAL BUILDINGS
620
MARKET SIZE (SF)
66,479,526
TOTAL VACANCY
ElmhurstMelrose
Park 290
355
Cicero
88
Aurora
6,940,097 SF (10.44%)
Naperville Downers
Grove
Chica
Airpo
Bedford
Park
55
Bolingbrook
DIRECT VACANCY
6,940,097 SF (10.44%)
SUBLEASE VACANCY
0 SF (0.0%)
AVAILABLE SPACE
8,008,258 SF (12.05%)
3Q13 NET ABSORPTION (SF)
2,057,094
YTD 2013 NET ABSORPTION (SF)
2,860,615
UNDER CONSTRUCTION (SF)
1,180,911
3Q13 NEW SUPPLY (SF)
1,765,048
294
Lemont
Romeoville
126
34
355
47
Tinley Park
30
Shorewood
52
Mokena
Joliet
New Lenox
71
80
45
Minooka
Elwood
Channahon
Mon
53
Ottawa
6
Seneca
57
47
102
55
Vacancy Rate
Net Absorption
10.44%
2,057,094 SF
Kankakee
Asking Rents
The I-80/Joliet Corridor submarket has historically catered to multi-state “big box” distribution. Its access to I-80, I-55 and
I-355 position the corridor well for distribution operations. In addition, the nation’s largest inland port is located in Joliet and
Elwood. This intermodal development, also known as CenterPoint Intermodal Center, has remained a bright spot not only
in the corridor, but for the entire Chicago market. CenterPoint Intermodal Center now offers intermodal service, direct rail
service, barge service as well as unit train service from multiple rail providers.
Vacancy | Absorption
Inventory by City
2.0 MM
25%
1.5 MM
21%
1.0 MM
17%
0.5 MM
13%
0
-0.5 MM
9%
‘08
2009
2010
2011
Vacancy Rate (%)
2012
2013
5%
Net Absorption (SF)
Ottawa, New Lenox, Mokena,
Frankfort, etc (26%)
Joliet (44%)
Tinley Park (6%)
Minooka (9%)
Elwood (15%)
Nearly 1.8 million SF of build-to-suit
development was completed during
the third quarter
38 NAI Hiffman
I-80/Joliet Corridor
Quarter in Review
Third quarter net absorption in the I-80/Joliet Corridor totaled
more than two million SF, largely in part due to the completion
of three build-to-suit projects totaling nearly 1.8 million SF. This
included a 1.6 million SF distribution facility for Home Depot in
Joliet’s CenterPoint Intermodal Center, an 80,000 SF building for
Old Dominion Freight Lines and a 67,000 SF facility for Dayton
Freight Lines, both in the Crest Hill Business Park. The vacancy
rate dropped by 74 basis points to end the quarter at 10.44%.
Construction Deliveries
8 MM
7 MM
6 MM
5 MM
4 MM
3 MM
2 MM
1 MM
0
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
The 442,000 SF distribution center located at 2780 McDonough
St in Joliet was purchased by Jones Lang LaSalle Income
Property Trust, Inc for $21 million in July, the largest sale of the
third quarter. Swedish-based appliance manufacturer Electrolux
expanded into the remainder of the 965,183 SF building located
at 801 Midpoint Rd in Minooka, taking an additional 365,359
SF. Logistics provider Partners Warehouse renewed its lease for
440,000 SF in Elwood’s CenterPoint Intermodal Center.
Blocks of Available Space
20,000-49,999
SF Available
50,000-99,999
SF Available
Two projects remain under construction in the I-80/Joliet
Corridor following the completion of nearly 1.8 million SF of
build-to-suit development during the third quarter. A 485,000 SF
speculative facility is underway in Joliet’s CenterPoint Intermodal
Center and a two-building 695,911 SF build-to-suit project
for Trader Joe’s remains under construction in Minooka. Both
projects are anticipated to be completed by the end of the year.
100,000-199,999
SF Available
200,000+
SF Available
0
5
10
15
20
25
30
Largest Blocks of Available Space
Building Address
City
Block Size (SF)
3851 Youngs Rd
Joliet
Looking Forward
501 International Pky
Minooka
849,691
The I-80/Joliet Corridor has come a long way since the
beginning of 2009, when the submarket’s vacancy rate peaked
at 20.7%. The area still has the potential to recover further, as
there remain 23 available contiguous blocks of space 100,000
SF or larger in the submarket.
3451 S Chicago St
Joliet
575,024
21705 W Mississippi St
Elwood
562,666
4100 Rock Creek Blvd
Joliet
509,216
401 E Laraway Rd
Joliet
475,104
456 International Pky
Minooka
456,476
Significant I-80/Joliet Corridor Sale Transactions
1,001,184
3rd Quarter 2013
Building Address
Size (SF)
Sale Price
Price PSF Buyer
Seller
2780 McDonough St, Joliet
442,000
$21,000,000
$48
Jones Lang LaSalle Income Property Trust, Inc
Exeter Property Group
8402 W 183rd St, Tinley Park
150,000
$4,350,000
$29
Tar-Hong Melamine USA, Inc
Chicago TItle Insurance Company
18470 Thompson Ct, Tinley Park
28,382
$1,349,000
$48
FKL Ventures, LLC
Old Second National Bank
Significant I-80/Joliet Corridor Lease Transactions
3rd Quarter 2013
Property Address
Leased (SF)
Tenant
Lease Type
26416 Centerpoint Dr, Elwood
440,000
Partners Warehouse
Lease renewal
801 Midpoint Rd, Minooka
365,359
Electrolux
Lease expansion
7979 W 183rd St, Tinley Park
129,873
Anvil International
New lease
510-530 Oakleaf Ct, Joliet
20,000
A&R Logistics
New lease
8940 W 192nd St, Mokena
10,205
Automatic Fire Controls
New lease
Entries highlighted in red denote NAI Hiffman transactions
39
Chicago
Northwest Indiana
# INDUSTRIAL BUILDINGS
432
MARKET SIZE (SF)
35,752,057
TOTAL VACANCY
2,579,927 SF (7.22%)
12
20
94
2,554,927 SF (7.15%)
SUBLEASE VACANCY
25,000 SF (0.07%)
AVAILABLE SPACE
3,939,602 SF (11.02%)
3Q13 NET ABSORPTION (SF)
99,687
YTD 2013 NET ABSORPTION (SF)
254,512
UNDER CONSTRUCTION (SF)
605,228
3Q13 NEW SUPPLY (SF)
100,000
Vacancy Rate
Net Absorption
7.22%
99,687 SF
20
90
94
912
Gary/Chicago Airport
outh
lland
12 20
Hammond
Porter
Gary
53
80 94
Portage
41
80 90
6
65
o
ts
Merrillville
Illinois
30
Indiana
DIRECT VACANCY
Michiga
51
Valparaiso
53
Crown
Point
Lowell
Asking Rents
The Northwest Indiana submarket is a bifurcated market, with areas north of I-80 including the towns of Hammond, East
Chicago, and Gary containing some of the heaviest manufacturing facilities in the world, home to companies like BP Amoco,
US Steel, and Arcelor Mittal. There are many functionally obsolete crane & manufacturing buildings housing firms in this area
that service the steel and chemical industries. South of I-80, towns such as Munster, Hobart, Merrillville and Portage cater
to more modern business parks. Indiana has historically held significant economic advantages over Illinois, such as lower
property taxes, utility costs, labor rates, and soft costs (workman’s compensation and unemployment insurance). Most
companies new to Northwest Indiana migrate from South Cook and Will Counties, but existing Northwest Indiana firms rarely
move across the state line to Illinois.
Vacancy | Absorption
Inventory by City
900,000
15%
600,000
13%
300,000
11%
0
9%
-300,000
7%
-600,000
‘08
2009
2010
2011
Vacancy Rate (%)
2012
2013
Hobart, Whiting,
Schererville, etc. (21%)
Merriville (4%)
Portage (11%)
5%
Net Absorption (SF)
Hammond (24%)
East Chicago (22%)
Gary (18%)
Positive demand was seen for the third
consecutive quarter, bringing 2013 net
absorption to 154,825 SF
40 NAI Hiffman
Northwest Indiana
Quarter in Review
The vacancy rate in the Northwest Indiana submarket
experienced little change during the third quarter, dropping
by only two basis points to 7.22%. Net absorption for the
quarter totaled 99,687 SF, largely affected by the delivery of
ITR America’s new 100,000 SF build-to-suit facility in Hobart’s
Northwind Crossings business park.
Construction Deliveries
1,500,000
1,200,000
900,000
AM Stabilizers Corporation, a supplier of liquid and powder
heat stabilizers for PVC applications, purchased the 123,000
SF building located at 705 Silhavy Rd in Valparaiso for about
$23.00 PSF. Relocating from Tinley Park, MAC Medical Supply
Company, a worldwide distributor of cutting edge medical
supplies, has leased 67,680 SF of space within the 650,000 SF
industrial building located at 9200 Calumet Ave in Munster.
600,000
300,000
0
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
Blocks of Available Space
There are four ongoing construction projects in the Northwest
Indiana submarket. A 50,228 SF speculative building is
underway in Portage’s Ameriplex at the Port business park. Two
build-to-suit projects are under construction, including a 350,000
SF facility for precision food cutting equipment manufacturer
Urschel Laboratories Inc in Chesterton’s Coffee Creek Center
and a 115,000 SF facility for Dawn Foods in Merrillville’s
Ameriplex at the Crossroads business park. Finally, Hanson
Logistics is expanding its existing Hobart facility by an additional
90,000 SF to consolidate its Crown Point & Munster facilities.
20,000-49,999
SF Available
50,000-99,999
SF Available
100,000-199,999
SF Available
200,000+
SF Available
0
5
10
15
20
25
30
35
Largest Blocks of Available Space
Building Address
City
6515 Ameriplex Dr
Portage
574,249
Looking Forward
1 N Bridge St
Gary
203,280
Construction activity continues to pick up in Northwest Indiana,
a clear indicator that demand has returned to the area and
looks to stay that way over the coming quarters. Companies will
continue to the be attracted to Northwest Indiana’s economic
advantages over nearby Illinois.
700 Chase St
Gary
200,000
1575 Louis Sullivan Dr
Portage
200,000
4000 7th Ave
Gary
160,000
3200 Sheffield Ave
Hammond
140,000
4407 Railroad Ave
East Chicago
118,457
Significant Northwest Indiana Sale Transactions
Block Size (SF)
3rd Quarter 2013
Building Address
Size (SF)
Sale Price
Price PSF
Buyer
Seller
705 Silhavy Rd, Valparaiso
123,000
$2,772,000
$23
AM Stabilizers Corporation
City of Valparaiso Redevelopment Commission
Significant Northwest Indiana Lease Transactions
3rd Quarter 2013
Property Address
Leased (SF)
Tenant
Lease Type
9200 Calumet Ave, Munster
67,680
MAC Medical Supply Company
New lease
4527 Columbia Ave, Hammond
62,711
K2 Manta
Lease expansion/renewal
1600 Northwind Pky, Hobart
12,962
Chicago Tribune
Lease renewal
6012 Industrial Hwy, Gary
7,500
Z-Force Transportation
New lease
Entries highlighted in red denote NAI Hiffman transactions
41
Industrial Investment Market
Third Quarter 2013
a
Pictured above: 2635 S Western Ave, part of the two-building portfolio purchased by Bridge Development Partners and Hunt Realty Investments in late July
Investment Market Trends
Industrial investment sales activity around Chicago slowed considerably in the third quarter of 2013, with total sales volume
um
reaching a level nearly one-fifth of the volume recognized in the relatively active second quarter. Property sales from investors
nv
to owner-occupiers, however, reached their 2013 high point in the third quarter, in regards to both the number of transactions
ran
and total sales volume. This reduced investment sales activity and increased interest in sales to owner-occupierss is reflective
of the continued inability of sellers to re-allocate capital to alternative quality investments, persuading them to refrain
re
from
selling unless they are confronted with a unique opportunity to maximize value or are faced with some otherr distinct
d
and
motivating circumstance. The resulting effect of these market dynamics is a constrained supply of desirable
ble product on the
market, which, coupled with a high level of demand, has lead us into a period of unsurpassed capitalization
at
rate compression,
as sub-6% cap rates are achievable for well-located core assets that do come to the market for sale..
The class “B” space has yet to realize the same level of demand and capitalization rate compression,
as investors, advisors
ss
and REITs remain fixed on core product and have thus far proved unwilling to translate their mo
more aggressive underwriting
to class “B” assets. A few large portfolios of class “B” industrial product came to market and
d tested the waters in the third
quarter, receiving less than optimal interest and falling short of seller expectations. Despite
e this, investors and developers
remain optimistic regarding class “B” pricing, given the extremely limited number of core
re opportunities and increasing
competition and pressure to place capital. Provided rent growth is recognized in the market,
further cap rate compression in
m
the class “B” space remains reasonable to expect, if not foreseeable, barring some
e other significant shift in market dynamics.
Interest rate fluctuations and uncertainty recognized in the second quarter continued
nt
to a lesser extent in the third quarter, but
have yet to have a significant impact on the Chicago industrial investment sa
sale market. The aforementioned market conditions
of constrained supply and heightened demand have thus far offset the negative
eg
impact of slightly higher interest rates,
ss “B” space will likely be the first to feel the pressure
particularly for core assets and strong credit tenant situations. The class
uc is from high-leverage buyers. As for property values,
from increasing interest rates, as the majority of interest in this product
ria cap rates and the 10-year treasury yield could provide a
the historically large variance between the current average industrial
u
fair amount of insulation from the risk of rising cap rates, and is ev
even considered by some as an argument
for further cap rate
compression.
One particularly important pool of buyers in the industriall sector, the single-tenant, net-lease buyer po
pool, continues to adapt
their underwriting and activities to remain competitive. Buyers will consider shorter term leases in prim
primary markets and will
clude smaller companies in healthy financial positions.
positio
expand their underwriting and business plans to include
Most of the activity
ch continues to be true for the Chicago industrial inv
remains in single assets and small portfolios, which
investment market at large.
2013 Quarter-by-Quarter Sales Comparison
Sales Volume vs. Construction Deliveries
40
$400
$4 Billion
24 Million SF
30
$300
$3 Billion
18 Million SF
20
$200
$2 Billion
12 Million SF
10
$100
$1 Billion
6 Million SF
0
Q1 2013
Q2 2013
Investor to User Sales (# buildings)
Investor to Investor Sales (# buildings)
42 NAI Hiffman
Q3 2013
$0
$0
‘01
‘02
‘03
‘04
‘05
‘06
Sales Volume ($ Millions)
Source: HFF
‘07
‘08
‘09
‘10
Sales Volume ($)
* 2013 figures are year-to-date through Q3
‘11
‘12 ‘13*
0 SF
Construction Deliveries (SF)
Source: HFF/NAI Hiffman
Industrial Investment
Investment Activity
Only three investment sale transactions were finalized in the third quarter of 2013, including four buildings that encompass
a total of 922,588 SF, with total sales volume of just over $76 million. These totals are down substantially compared to the
second quarter of 2013, when a reconciled total of 15 investment sales occurred, including 31 buildings and 9.2 million SF,
with total sales volume in excess of $366.2 million. These third quarter results also represent a decrease in activity when
compared to the relatively slow first quarter of 2013, when a reconciled total of six investment sales occurred, including 11
buildings and 2.3 million SF, with a total sales volume of approximately $85.9 million.
The largest transaction of the quarter involved TA Associates Realty purchasing from LaSalle Investment Management a
515,497 SF distribution building located at 437 Tower Blvd in Carol Stream for $34.5 million. The property was leased to a
single tenant, Owens & Minor, for 7 years.
Another transaction occurring in the quarter was Gearing Stone’s sale of two properties, located at 2635 S Western Ave and
2658 S Leavitt St in Chicago, to Bridge Development Partners, LLC and Hunt Realty Investments, Inc. The two adjacent
properties totaled 306,797 SF and sold for $34.325 million. These properties were specialized cold storage facilities located in
a dense, infill location on the south side of Chicago, contributing to the higher price per square foot.
Although investment sale transactions decreased during the third quarter, sales from investors to owner-occupiers increased,
as a total of six transactions took place involving six buildings totaling 962,735 SF, with total sales volume in excess of $52.8
million. This activity was an increase over both the previous quarter and the first quarter of 2013, when total sales volume
equaled $23.5 million and $35.7 million, respectively.
Despite the reduced investment sales activity realized during the third quarter, it is expected that activity will increase
substantially in the fourth quarter, given a large number of transactions currently underway in the market and assisted by the
propensity of the market to stimulate year-end sales activity.
Significant Industrial Investment Sales
3rd Quarter 2013
Size (SF)
Sale Price
Price PSF
# Bldgs
Buyer
Seller
515,497
$34,500,000
$67
1
Devonshire Realty
LaSalle Investment Management
306,797
$34,325,000
$112
2
Bridge Development/Hunt Realty
Gearing Stone
100,294
$7,550,000
$75
1
Industrial Income Trust Inc
Seigle Investments LLC
Buyer Type by Sales Volume
Private REIT
$183.4 million
Private Investor
$277.6 million
Public REIT
$291.2 million
The Industrial Investment
Market Review data has
been provided by HFF, L.P.
Developer
$11.3 million
Fund
$418.1 million
HFF (Holliday Fenoglio Fowler, L.P.) and HFFS (HFF Securities L.P.) are owned by HFF,
Inc (NYSE: HF). HFF operates out of 21 offices nationwide and is a leading provider of
commercial real estate and capital markets services to the U.S. commercial real estate
industry. HFF together with its affiliate HFFS offer clients a fully integrated national capital
markets platform including debt placement, investment sales, equity placement, advisory
services, loan sales and commercial loan servicing. www.hfflp.com.
Institutional/Advisor
$411.3 million
Chart data is 2012 to present, source: HFF, L.P.
43
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North America
Europe &
The Middle East
Canada
Mexico
United States
Latin America &
The Caribbean
Argentina
Bulgaria
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Denmark
Finland
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Georgia
Locations by Country
North America
Canada
Mexico
United States
Latin America &
The Caribbean
Argentina
Bahamas
Brazil
Chile
Costa Rica
Jamaica
Panama
Peru
Venezuela
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Methodology
& Definitions
Methodology
The information included in this review is the result of a compilation
and analysis of data from various sources on class A, class B
and class C industrial properties located in the metropolitan
Chicago area defined by the submarket map on the previous
page. NAI Hiffman obtained the information from property
representatives, CoStar Group, RealCapital Analytics, industry
periodicals and magazines, our in-house property database, and
other sources. NAI Hiffman greatly appreciates the participation
of each of these individuals, companies and resources,
without whose help this report would not have been possible.
All of the information detailed throughout this report is saved
and organized in our own in-house database and is regularly
updated. Utilizing this database, we can analyze, calculate and
report demographic information, inventory, vacancy, availability,
net absorption, and transactional information.
Net Absorption The net change in occupied space
in a given market between the current measurement
period and the last measurement period. Net
absorption can be either positive or negative and must
include decreases as well as increases in inventory
levels. For the purpose of this report, sublease space
is included in the calculation of net absorption.
New Supply The total inventory delivered to the
market since the last measurement period. Delivered
is defined as total square footage and/or number
of buildings that has completed construction and
received a certificate of occupancy during a stated
period.
Under Construction Buildings where either: a) actual
ground breaking has occurred (site excavation or
foundation work) and construction is ongoing (not
Definitions
abandoned or discontinued) but for which a certificate
The NAI Hiffman Market Reviews track several measures of market
undergoing conversion to office from another use or
conditions. This information is collected for individual properties
c) properties undergoing a major renovation where
then consolidated, organized and analyzed for submarket and
75 percent or more of the building is not available for
market totals. These terms, used throughout the reports, are
lease and building generally requires a certificate of
defined below according to NAIOP Terms & Definitions.
occupancy to be made available for lease.
Total Inventory (Market Size) The total square footage of gross
Available Space The total amount of space that is
rentable area in a specific market. It includes the gross rentable
currently being marketed as available for lease in a
area in buildings that have received a certificate of occupancy.
given time period. It includes space that is available,
Total inventory increases when a new building is delivered and
regardless of whether the space is vacant, occupied,
decreases when an existing building is destroyed, demolished or
available for sublease, or available at a future date.
its use changes.
Available space excludes shadow space.
Vacancy Rate A measurement expressed as a percentage of
Shadow Space That portion of leased space which
the total amount of vacant space divided by the total amount of
is vacant but not available space. Shadow space is
inventory. Vacant space is inventory that is not currently occupied.
difficult to measure. (Synonym: phantom space)
of occupancy has not yet been issued; or b) properties
45
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Senior Associate
630 691 0601
jhenry@hiffman.com
Matt Novak
Associate
630 693 0659
mnovak@hiffman.com
Aubrey Van Reken
Vice President
630 693 0679
avanreken@hiffman.com
James Adler
Executive Vice President
630 691 0605
jadler@hiffman.com
Adam Johnson
Vice President
630 317 0729
ajohnson@hiffman.com
Daniel O’Neill
Executive Vice President
630 691 0610
doneill@hiffman.com
Michael Van Zandt
Executive Vice President
630 368 0848
mvanzandt@hiffman.com
Brian Edgerton
Vice President
630 693 0671
bedgerton@hiffman.com
Patrick Kiefer
Executive Vice President
630 693 0670
pkiefer@hiffman.com
Jack Reardon
Senior Vice President
630 693 0647
jreardon@hiffman.com
Jason Wurtz
Vice President
630 693 0692
jwurtz@hiffman.com
Linda Garske
Senior Vice President
630 317 0742
lgarske@hiffman.com
Kyle Kreminski
Associate
630 317 0716
kkreminski@hiffman.com
Jason Streepy
Senior Vice President
630 317 0743
jstreepy@hiffman.com
Shawn Frick
Financial Analyst
630 317 0702
sfrick@hiffman.com
Patrick Sullivan
HFF, L.P.
Managing Director
312 980 3610
psullivan@hfflp.com
Mark Katz
HFF, L.P.
Director
312 528 3650
mkatz@hfflp.com
Jim Tsevis
Vice President
630 693 0673
jtsevis@hiffman.com
Dan Hiffman
Senior Sales Associate
630 693 0655
dan@hiffman.com
Jennifer Hopkins
Senior Retail Associate
630 693 0667
jhopkins@hiffman.com
Investment Services
Arthur Burrows
Senior Vice President
630 693 0675
aburrows@hiffman.com
Retail Services
Mike Meksto
Senior Vice President
630 317 0717
mmeksto@hiffman.com
46
NAI Hiffman
Industrial Services
John Cash, SIOR
Executive Vice President
630 691 0609
jcash@hiffman.com
Steve Connolly, SIOR
Executive Vice President
630 693 0642
sconnolly@hiffman.com
David Haigh
Vice President
630 693 0649
dhaigh@hiffman.com
Stephen Sullivan
Vice President
847 610 0123
ssullivan@hiffman.com
Casey Baird
Associate
630 693 0697
cbaird@hiffman.com
Benjamin Cremer
Senior Vice President
630 691 0614
bcremer@hiffman.com
Daniel Leahy, SIOR
Executive Vice President
630 691 0604
dleahy@hiffman.com
Brett Tomfohrde
Associate
630 693 0669
btomfohrde@hiffman.com
Kyle Barrett
Associate
847 693 0689
kbarrett@hiffman.com
Kelly Disser
Vice President
630 317 0721
kdisser@hiffman.com
Adam Marshall, CCIM
Vice President
630 691 0603
amarshall@hiffman.com
Eric Tresslar
Executive Vice President
630 693 0650
etresslar@hiffman.com
Howard Bergdoll
Associate
630 317 0724
hbergdoll@hiffman.com
Eric Fischer
Vice President
630 693 0677
efischer@hiffman.com
Mark Moran
Executive Vice President
630 693 0656
mmoran@hiffman.com
John Whitehead
Vice President
630 693 0643
jwhitehead@hiffman.com
Duke Botthof
Executive Vice President
847 520 0204
botthof@hiffman.com
Jeff Fischer
Executive Vice President
630 317 0726
jfischer@hiffman.com
Lawrence Much, SIOR
Executive Vice President
630 691 0606
lmuch@hiffman.com
Joe Bronson, SIOR
Vice President
630 317 0725
jbronson@hiffman.com
Chris Gary
Vice President
630 693 0694
cgary@hiffman.com
Michael Robbins
Vice President
630 693 0680
mrobbins@hiffman.com
Brian Colson
Executive Vice President
630 691 0619
bcolson@hiffman.com
Bruce Granger
Senior Vice President
630 693 0648
bgranger@hiffman.com
Adam Roth, CCIM, SIOR
Executive Vice President
630 691 0607
aroth@hiffman.com
Whitney Kannaka
Director of Marketing
630 317 0713
wkannaka@hiffman.com
Matt Hronick
Senior Designer
630 693 0693
mhronick@hiffman.com
Lauren Fishbune
Marketing Specialist
630 317 0737
lfishbune@hiffman.com
Catherine DeBoer
Elsa Gaztambide
Karen Kirian
Melody Lawrence
Cindy Nickell
Alison O’Connell
Denise Racana
Tammi Sowinski
Erin Thill
Lynn Zbierski
Marketing
Research
For further information regarding the content of this market
review, or for specialty reports, please contact your local
broker or:
Craig Hurvitz
Director of Research
630 693 0645
churvitz@hiffman.com
Brian Chandler
Research Associate
630 317 0738
bchandler@hiffman.com
47
NAI Hiffman Commercial Real Estate Services
One Oakbrook Terrace | Suite 600 | Oakbrook Terrace IL 60181 | USA
+1 630 932 1234 | www.hiffman.com