For the first time since the recession, industrial spec development is back in a big way in Chicagoland, according to a study by the JLL Research team that was the subject of a cover story in this week’s edition of Crain’s Chicago Business.
More than 8 million square feet of warehouse/distribution space is now under development here, more than any other market in North America.
But while that’s certainly good news for the local industrial real estate market — and a signal that the overall U.S. economy is ready for a fuller recovery — all the activity does come with some risk, as Trevor Ragsdale, head of JLL’s Chicago Industrial group, told Crain’s:
“It’s a bit of a race and a gamble to capture the next big deals that come through town. If we get back to the peak levels of demand that we saw right before the crash, everybody will be fine. Right now, it feels like there are more spec projects than there are deals to take them. We could find ourselves in an overbuilt situation pretty quickly.”
Time certainly will tell, but, in the meantime, developers have their eye on a wide variety of tenants, with spec projects ranging in size from under 100,000 square feet to more than 1.2 million square feet.
To read the complete Crain’s cover story, click here.