Q2 2025 Chicago Industrial Market Report

Chicago ranks in 10th place for the top metros recording the highest absorption trends, noting under 1 million square feet absorbed over the past year. Despite decreased absorption levels compared to prior years, tenants still favor the metro’s industrial sector. Logistics space is the most sought after, accounting for 90% of absorption over the past 12 months. The metro also notes positivity with stable construction levels. There were 1.2 million square feet completed over the past year, which is around 1% of overall inventory and below the national construction level. Moving forward, Chicago’s fundamentals set the market up for stability and will allow landlords to find less supply-side pressure compared to other metros nationally.

 

Top Updates

• PsiQuantum is planning a $500 million investment for a new campus, adding 250 jobs to the metro.
• The current vacancy rate of 5.9% is stable and remains below the historical average of 7.5%.
• Around 4,000 logistics firms and 5,000 manufacturers filled 500 million square feet of space.

 

By the Numbers

• SF Under Construction: 13M
• SF Delivered: 2M
• Vacancy Rate: 5.9%
• Rent Growth: 4.3%
• Average Price Per SF: $98
• Asking Rent Per SF: $9.88

 

Rents | Vacancy | Construction

Chicago recorded a vacancy rate of 5.9% at the end of Q2 2025, which is below its historical level of 7.5%. New developments are attracting the most demand. For example, Expeditors International signed for full occupancy of the Bridge Point Melrose Park building, which was added to Chicago this year. The metro noted a 4.3% rent growth rate at the end of the second quarter, ahead of the national 1.7% level. Rents across Chicago are around $9.90 per square foot, with flex spaces noting the highest rents at $15.30 per square foot. With a stable vacancy rate, rent growth should continue to maintain its growth rate through the second half of 2025.

 

The metro added 12.1 million square feet of space over the past 12 months, with 13 million under construction at the end of Q2 2025. Chicago’s convenient location makes it a standout for expansions, with logistics companies looking to move or expand here. This includes additions from Uline, Expeditors International, and OnTrac. The largest property underway is a 1.2 million-square-foot distribution facility in the I-88 West submarket. It is set for delivery in March 2026, and will be a Class A property.

 

About 0.9% of industrial inventory is underway, about 50% the national average. 

 

Vacancy Rate

Source: CoStar Group, Inc.

 

Market Asking Rent per SF & Rent Growth

Source: CoStar Group, Inc.

 

Sales

Chicago recorded a total $4.8 billion in 12-month sales volume, with logistics properties accounting for $2.8 billion in deals. Transactions have been driven by institutional buyers, which came back to the market at the end of 2024 and stayed for the first half of 2025. The largest deal of the second quarter occurred in June for an 11-property portfolio in the North Kane/I-90 submarket. In total, the property sold for $270 million, with a price of $101.38 per square foot. As around $400 million in loans is set to mature moving forward, Chicago may see an influx of sellers motivated to offload their assets and use 1031 exchanges to their advantage.

 

Q2 2025 Sales Volume: $1.1B

 

Sales Volume & Market Sale Price per SF

Source: CoStar Group, Inc.