First Quarter 2010 Overview

April 19, 2010

Chicago Metro

The Market Continues to Decline for Owners of Industrial Real Estate

The vacancy rate for industrial properties in the Chicago Metropolitan Area increased from 12.15% to 12.25% between January 1, 2010 and March 31, 2010.

First Quarter 2010 Net Absorption for the Chicago Area was negative 3,820,000 SF. The Chicago Metropolitan Area’s total industrial real estate market is 1.3 billion SF. 160 million SF is currently available. Sale and Lease rates have declined by 30% to 40% from 2007 peaks.

What does this information mean to you?

If you are a tenant looking for space or a tenant with a lease expiring in the next THREE years, you should have your broker contact your landlord to begin lease extension discussion.

If you are looking for a building to purchase, you may find the deal of a lifetime. Owners are not giving buildings away, but they are selling them at about 1995 prices.

If you own a building that you want to sell, please wait until 2011. If you own a building that you want to lease to a tenant, be prepared to be very aggressive with rent concessions.

We are at the bottom of the trough. Rental rates and sales prices will increase rapidly when demand returns. If you can extend your lease, DO IT NOW!