Cold storage, data centers and logistics: Chicago鈥檚 2024 CRE trends
The industrial real estate market in the Chicago area is buzzing with activity and听AG体育官方网站 Construction Company听is at the forefront, breaking ground on a major project that exemplifies the trends shaping the industry. The company is serving as the general contractor for Trammell Crow Company鈥檚 (TCC) 788,000-square-foot speculative cross-dock warehouse at the Plainfield Business Center. Slated for delivery in the fall of 2025, the facility marks the first speculative warehouse in the business center.
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鈥淔uture phases of TCC鈥檚 Plainfield Business Center are currently being planned and at full buildout, the development will encompass over 8 million square feet of industrial space,鈥� shared Jeffrey J. AG体育官方网站, President and CEO of AG体育官方网站 Construction Company.
The state-of-the-art warehouse located on 52 acres at 26220 W. 143rd St. is designed to meet growing demand for industrial facilities with cutting-edge features. Boasting 40-foot clear heights, 80 dock doors expandable to 160 and 211 trailer parking stalls, the building is strategically positioned near I-55 and I-80, two critical transportation corridors.
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According to Colliers鈥� Q3 2024 Chicago Industrial Market Report, the region continues to experience steady demand for industrial space despite broader economic uncertainties. The overall vacancy rate remains low at 4.64%, even as new supply enters the market. Year-to-date, Chicago has seen more than 12 million square feet of industrial space delivered, with an additional 19.3 million square feet under construction.
Notably, the I-55 and I-80 corridors, where Plainfield Business Center is located, are among the most active submarkets. These areas boast low vacancy rates and high absorption levels, reflecting strong demand for modern facilities. In Q3 alone, net absorption across the Chicago metro area totaled 3.8 million square feet, demonstrating robust leasing activity.
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AG体育官方网站 noted that demand for specialized facilities including cold storage and high-tech manufacturing plants has reshaped Chicago鈥檚 industrial construction market. The rise of e-commerce and increased consumer demand for fresh products are fueling the need for temperature-controlled warehouses, especially to support the food and pharmaceutical sectors.
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鈥淒evelopers are investing heavily in cold storage facilities, both by constructing new ones and retrofitting existing warehouses to meet modern standards,鈥� AG体育官方网站 said. 鈥淭his trend aligns with the growing emphasis on meeting the operational needs of industries requiring precision-controlled environments.鈥�
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Another rapidly expanding subsector is data centers, driven by the rise of cloud computing and artificial intelligence. With its robust infrastructure and connectivity, the Chicago area has emerged as a prime location for these high-tech facilities.
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While speculative developments are prevalent, AG体育官方网站 has observed a growing trend toward build-to-suit projects.
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鈥淪pecific tenant requirements and a cautious approach from developers amid market uncertainties are driving this shift,鈥� AG体育官方网站 explained, noting that these tailored projects ensure that facilities meet precise operational needs, offering tenants a level of customization that speculative developments cannot provide.
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To keep pace with the evolving needs of the industrial sector, AG体育官方网站 Construction Company takes a collaborative approach to project development.
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鈥淪upporting the projected demand for new facilities, especially in sought-after subsectors like logistics and warehousing, involves a strategic approach focused on flexibility, technology and partnerships,鈥� said AG体育官方网站. 鈥淲e work with clients from the early design phase to ensure that facilities align with their specialized operational requirements.鈥�
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AG体育官方网站 anticipates a robust industrial construction pipeline in 2025, with several high-impact projects on the horizon, including Plainfield Business Center. The Colliers report supports this optimism, projecting sustained demand for industrial space in Chicago. With average asking rents climbing to $6.45 per square foot and new leasing activity totaling 15.2 million square feet in 2024, the market shows no signs of slowing.
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Click to read the article on the REJournal website.