metropolitan chicago hiffman industrial report 3q… · nai hiffman is pleased to provide to you...
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Metropolitan ChicagoNAI Hiffman Industrial Market ReportThird Quarter 2010
www.hiffman.com
Committed to Chicago.
Connected to the World.™
To our valued clients and partners...NAI Hiffman is pleased to provide to you our Metropolitan Chicago industrial market report for the third quarter of 2010. We trust you will fi nd it helpful as you review your real estate strategies and the relevant changes that are taking place within the Chicago marketplace. I am happy to say that we are seeing positive signs which are based not solely on hope but on statistics, suggesting that contrary to the naysayers’ predictions, the sky is NOT falling.
We are seeing an increase in our deal fl ow, as well as confi rmation from the investor community that there is an immense amount of money on the sidelines ready to be deployed, and we are seeing glimpses of activity in the sales of quality assets which will help to reestablish a benchmark on values and perhaps bring buyer and seller closer together. We also look forward to another election cycle, which we anticipate will return us to fi rm political gridlock, which is unfortunately needed to reestablish regulatory business “rules of the road.”
I am a big believer that history repeats itself, and in looking back, perhaps we are able to secure a keen perspective on what is to come, learning lessons and gaining experience from the hard times in each cycle. Maybe said another way, “there is nothing new under the sun.”
To jog your memory, here are the dates we survived to remember in retrospect:• 1973-1974 - Stock market collapse and oil crisis• 1980-1981 - Infl ation peaks over 14% and fed rate is at 16%• 1986 - Tax reform in our industry changes everything• 1987 - Black Monday• 1989 - RTC bail out• 2000 - The Dot Com bust• 2001 - The impact of 9/11 shuts down the world• 2007 - Credit Market Crisis• 2008 - Oil prices peak and fed rescue plan begins• 2009 - Banks fail, Tarp comes unemployment is over 10%• 2010 - We begin to shift, change and fi x the fundamentals
Through each setback, we were able to make forward progress, discovering new ways to conduct business and create profi t for partners and clients who were willing to have faith in our abilities - adapting and modifying their strategies as the market dictated.
We look forward to assisting you with creative adaptations, innovative strategies and successful outcomes as we continue to navigate the new normal for the real estate industry in the days and months ahead.
Regards,
David A. Petersen, RPACOO NAI HiffmanCEO, NAI Hiffman Asset Management
3 NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT – THIRD QUARTER 2010
Table o
f Co
ntents
Metropolitan ChicagoNAI HiffmanIndustrial Market ReportThird Quarter 2010
Local Economy. . . . . . . . . . . . . . . . . . . . . . 4
Industrial Market Statistics. . . . . . . . . . . . . 7
Industrial Market Summary . . . . . . . . . . . . 8
Industrial Submarket Overviews
Lake County . . . . . . . . . . . . . . . . . . . 10
Southeast Wisconsin . . . . . . . . . . . . 12
I-90/Northwest . . . . . . . . . . . . . . . . . 14
Northwest Cook . . . . . . . . . . . . . . . . 16
North Cook . . . . . . . . . . . . . . . . . . . . 18
Fox Valley . . . . . . . . . . . . . . . . . . . . . 20
Central DuPage . . . . . . . . . . . . . . . . 22
O’Hare. . . . . . . . . . . . . . . . . . . . . . . . 24
West Cook . . . . . . . . . . . . . . . . . . . . 26
I-88 Corridor . . . . . . . . . . . . . . . . . . . 28
I-55 Corridor . . . . . . . . . . . . . . . . . . . 30
South Cook. . . . . . . . . . . . . . . . . . . . 32
I-80/Joliet Corridor . . . . . . . . . . . . . . 34
Submarket Map . . . . . . . . . . . . . . . . . . . . . 36
Methodology / Defi nitions . . . . . . . . . . . . . 37
NAI Hiffman / NAI Global . . . . . . . . . . . . . . 38
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NAI Hiffman understands that our success
is the direct result of creating successful
outcomes for our clients.
We build lasting relationships with our clients
and partners, engaging our individual initiative
joined with collaboration and teamwork.
Our unrelenting commitment to excellence
and integrity forms the foundation of our
guiding principles and shapes our strategies.
Committed to Chicago.
Connected to the World.™
Build on the power of our network.
Local EconomyPOPULATION (2009 EST.) 9,804,845
POPULATION CHANGE (2000-2009 EST.) +5.3%
NUMBER OF HOUSEHOLDS (2008) 3,516,729
MEDIAN HOUSEHOLD INCOME (2008 EST.) $67,234
GROSS METRO PRODUCT (2008) $521 BILLION
LABOR FORCE 4,858,400
TOTAL JOBS GAINED (06/09-06/10) -71,600
CHICAGO AREA UNEMPLOYMENT RATE 10.5%
ILLINOIS UNEMPLOYMENT RATE 10.3%
U.S. UNEMPLOMENT RATE 9.6%
The third largest metropolitan area in the U.S. after New York and Los
Angeles, Chicago is the most infl uential 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 fl ow of goods
and services through aiports 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, fi nancial, and derivative futures
products with the Chicago Mercantile Exchange and Board of Trade.
Quarter in Review
All eyes are on the economic recovery, which, after recording an
optomistic GDP boost early in 2010, has slowed to a crawl when
compared to typical recovery periods. Real GDP, when chained to the
value of the 2005 dollar, has been positive for the past four quarters,
a sure sign that the recover is underway. GDP grew by 1.7% in the
second quarter according to the U.S. Department of Commerce, a
pace slower than the 3.7% increase recorded in the fi rst quarter of the
year and the 5.0% increase measured during the fi nal quarter of 2009.
Unemployment has been the sore spot in the ongoing recovery, with
local and national rates stubborn to budge from their recent highs
around 10%. However, in nearly every past recession period, the job
market was the last to recover, typically lagging other leading and
conincident economic indicators, including GDP growth, the stock
markets, changes in business inventories and industrial production.
50
100
150
200
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2010
Chicago Case-Shiller Index
U.S. National Case-Shiller Index
1987
Case-Shiller Home Price Indices
Source: Standard & Poor’s
0
2
4
6
8
10
1991
1993
1995
1997
1999
2001
2003
2005
2007
20102009
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
10-Year Treasury Note
198910-Year Treasury Note
Source: Commodity Systems, Inc. (CSI)
2%
4%
6%
8%
10%
12%
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Metro ChicagoIllinoisU.S.
Local and National Unemployment
Source: Bureau of Labor Statistics
Local Economy Review
5 NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT – THIRD QUARTER 2010
Despite reported job losses totaling 241,000 jobs between May
and June, the U.S. total nonfarm employment has increased by
751,000 jobs since the beginning of the year according to the
Bureau of Labor Statistics. While preliminary fi gures for August
and September point to additional losses, they are nowhere near
the rates at which jobs were being lost during the recession.
Barring any unforseen mass layoffs, job growth will likely be
positive for 2010 for the fi rst time since 2007.
Industrial production has grown every month for more than a
year, but experienced a slight decline in September compared
to the previous month. However, total industrial production was
still up 5.4% over a year ago, according to the Federal Reserve’s
September report. Retail sales and business inventories
continue to show strong growth, with monthly sales for retail
and food services increasing 7.3% and manufacturing and trade
inventories increasing 4.7% over a year ago. These are all signs
that the recovery, while it may be slowing, is still ongoing and
consumer spending is increasing.
Looking Forward
When measured by depth, duration and breadth, the U.S. is
only beginning to recover from the worst economic recession
since the Great Depression. The Bureau of Economic Research
recently declared June 2009 the end of the recession. The four
quarters that followed posted a 3% increase in real GDP, a rather
sluggish rebound when compared to other similar recovery
periods. Historically, deep recessions have been followed by
surprisingly strong recoveries. So far, this has not been the case.
There are many factors and hypotheses as to why the recovery
thus far has been sluggish. One of the factors involves the
residential real estate market that was overbuilt during the boom
period earlier in the decade resulting in less demand and limited
construction. Other factors include less consumer spending
following the steep decline compared to other severe recessions,
and a general sentiment of uncertainty and lack of confi dence in
the economy and the current administration’s policies.
The economy will likely continue to grow at a modest rate through
the end of the year, then begin to gradually accelerate in 2011 as
concerns of a double-dip recession ease, consumer spending
and confi dence pick up, and companies continue to hire and
expand. Hopefully, the unemployment rate will eventually begin
to decrease, reinforcing optimistic views, and speeding up the
pace of the economic recovery.
Local E
cono
my R
eview
-4%
-2%
0%
2%
4%
6%
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
CPI 12-Month Percent Change
2000
Core CPI 12-Month Percent Change(excludes volatile food and energy prices)
Consumer Price Indices (CPI)
Source: Bureau of Labor Statistics
-50%
-30%
-10%
10%
30%
50%
$0
$30
$60
$90
$120
$150
1991
1993
1995
1997
1999
2001
2003
2005
2007
2010
2009
Crude Oil PriceMonthly Percent Change
1989
Crude Oil Prices
Source: WTRG Economics
-6%
-3%
0%
3%
6%
$8 T
$10 T
$12 T
$14 T
$16 T
1990
1994
1998
2002
2004
1992
1996
2000
2006
2008
1993
1997
2001
2003
1991
1995
1999
2005
2007
20102009
Adjusted GDP Growth (based on 2005 dollar) (%)
GDP Value (Trillions of $)
U.S. Gross Domestic Product
Source: Bureau of Economic Analysis
$100 B
$150 B
$200 B
$250 B
U.S. ExportsU.S. Imports
August 2010Trade Deficit -$46.3 B
TradeDeficit
May ‘08
Feb
‘08
Aug
‘07
No
v ‘07
May ‘09
Feb
‘09
Aug
‘08
No
v ‘08
May ‘10
Aug
‘10
Feb
‘10
Aug
‘09
No
v ‘09
U.S. Imports & Exports - Trade Balance
Source: U.S. Census Bureau
I l l i n o i sW i s c o n s i n
Ind
ian
a
Illi
no
is
WaukeganRegional Airport
OhareInt'l Airport
WestoshaAirport
Chicago ExecutiveAirport
DupageAirport
Gary/Chicago Airpo
Chicago MidwayAirport
94
94
90
94
94
94
90
90
90
80
57
57
80
80
55
55
5588
290
290
294
294
355
355
39
39
Aurora
Plainfield
Munster
Hammond
Elk Grove Village
Schererville
Lake Zurich
Monee
Crystal Lake
MontgomeryWoodridge
Minooka
Addison
Arlington Heights
Pleasant Prairie
Grayslake
Skokie
Northbrook
FranklinPark
Naperville
Highland Park
North Aurora
BedfordPark
Park Forest
Tinley Park
NilesSchaumburg Des
Plaines
St Charles
New Lenox
Romeoville
WestChicago
Geneva
M
MattesonMokena
CarolStream
Bolingbrook
Lake Forest
Waukegan
Joliet
Elgin
Elmhurst
Burr Ridge
Vernon Hills
BuffaloGrove
Wood Dale
La Grange
PalosHeights
Elwood
Rockford
CherryValley
Beloit
helle
La Salle
DeKalb
Chicago
Evanston
WillowSprings
DownersGrove
1
2
35
67
9
10
11
12
13
8
4
I l l i n o i sW i s c o n s i n
90
39
kford
CherryyyCCValleyyy
Beloit
DeKalbalb
Industrial Submarket Overviews
Lake County . . . . . . . . . 10
Southeast Wisconsin . . 12
I-90/Northwest . . . . . . . 14
Northwest Cook . . . . . . 16
North Cook . . . . . . . . . . 18
Fox Valley . . . . . . . . . . . 20
Central DuPage. . . . . . . 22
O’Hare. . . . . . . . . . . . . . 24
West Cook . . . . . . . . . . 26
I-88 Corridor . . . . . . . . . 28
I-55 Corridor . . . . . . . . . 30
South Cook. . . . . . . . . . 32
I-80/Joliet Corridor . . . . 34
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4
5
6
7
8
9
10
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13
7 NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT – THIRD QUARTER 2010
Industrial M
arket Statistics
The data compiled in the Chicago Industrial Market Report 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 report 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.
Industrial Market StatisticsNAI HiffmanIndustrial Market ReportThird Quarter 2010
Submarket # Bldgs. Total RBA Vacant Vacancy 3Q10 NET YTD Net New Supply Under Constr.
(SF) (SF) Rate (%) Absorption (SF) Absorption(SF) (SF) (SF)
Chicago North
Chicago South
North Cook
West Cook
Southwest Cook
South Cook
I-57/Will Corridor
Lake County
Northwest Cook
O’Hare
Central DuPage
I-55 Corridor
McHenry County
I-90/Northwest
Fox Valley
I-88 Corridor
I-80/Joliet Corridor
DeKalb County
I-39 Corridor
Southeast Wisconsin
Northwest Indiana
Flex Space Summary
Total Flex Space
Total Market
Summary
1,121
1,728
714
741
490
1,126
80
930
525
1,725
1,098
655
437
430
495
771
614
57
219
522
431
1,529
16,438
66,180,400
151,573,528
46,032,324
60,397,505
39,226,488
85,528,194
12,351,467
66,750,778
28,431,207
100,509,670
67,028,163
80,357,318
25,562,283
25,620,633
32,089,494
61,834,957
62,408,397
6,970,869
24,053,891
44,614,814
35,702,307
72,373,894
1,194,598,581
5,007,916
14,940,529
3,563,057
7,069,207
3,332,996
10,197,898
2,842,707
7,922,589
3,298,303
12,837,390
6,846,528
10,486,603
3,320,992
2,792,342
3,930,949
7,769,179
11,072,174
251,641
4,718,311
5,335,298
3,363,489
10,029,212
140,929,310
7.7%
9.9%
7.7%
11.7%
8.5%
11.9%
23.0%
11.9%
11.6%
12.8%
10.2%
13.0%
13.0%
10.9%
12.2%
12.6%
17.7%
3.6%
19.6%
12.0%
9.4%
13.9%
11.8%
-654,614
-941,163
-253,485
332,212
273,382
619,352
49,000
-267,097
113,182
-309,760
131,055
714,448
80,881
195,591
-128,882
363,396
-168,031
-13,863
-378,977
983,661
163,557
159,750
1,063,595
-891,939
-1,207,386
-1,048,697
76,474
115,998
578,225
-498,236
-529,531
326,375
-1,325,594
54,578
410,470
-12,878
29,522
-186,501
989,967
249,307
43,441
-389,040
1,893,642
861,791
-746,363
-1,206,399
0
0
0
0
0
137,078
0
0
0
0
0
0
0
0
0
0
0
0
0
1,000,000
0
0
1,317,078
0
91,000
0
0
0
514,000
0
214,000
0
0
0
53,000
42,000
52,000
0
0
217,712
0
0
0
0
30,000
1,213,712
Metropolitan ChicagoNAI HiffmanIndustrial Market Report Mid-Year 2010
Market Summary
Chicago is the second largest industrial market in the U.S. with over
1.15 billion SF of inventory. The Chicago industrial market remains the
most infl uential 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
For the fi rst time in nearly two years, overall conditions improved
throughout the Chicago Industrial Market. The vacancy rate decreased
30 basis points to 11.8% compared to last quarter’s 12.1% rate. A
year ago, the vacancy rate was in similar territory, at 11.7%, but was
still on its way up and many were unsure of how high it would reach
and when it would peak. It now appears the peak occurred mid-2010,
about 12 months after the recession ended according to the Bureau of
Economic Research. The coming quarters may still experience minor
vacancy increases, as the industrial real estate market typically lags
the economy by about 18 to 24 months, but another period of steadily
rising vacancies and negative net absorption is unlikely. Although overall
vacancy decreased for the market, a few submarkets continued to post
rises in vacancies for the third quarter, most notably the Lake County,
Fox Valley and I-39 Corridor submarkets.
Net absorption, the change in occupied space that is used to measure
demand, was positive for the fi rst time in eight quarters, totaling
1,063,595 SF for the quarter. The tally year-to-date, however, remains
in negative territory, totaling negative 1,206,399 SF for 2010, due to the
-10,000,000
-6,000,000
-2,000,000
2,000,000
6,000,000
10,000,000
0%
3%
6%
9%
12%
15%
3Q07
4Q07
1Q08
2Q08
3Q10
3Q08
4Q08
1Q09
2Q09
3Q09
4Q09
1Q10
2Q10
Net Absorption (SF)Vacancy Rate (%)
Vacancy and Absorption
# INDUSTRIAL BUILDINGS 16,438
MARKET SIZE (SF) 1,194,598,581
VACANCY 140,929,310 SF (11.8%)
3Q10 NET ABSORPTION (SF) 1,063,595
2010 YTD NET ABSORPTION (SF) -1,206,399
NEW SUPPLY (SF) 1,317,078
UNDER CONSTRUCTION (SF) 1,213,712
Pictured Above: 6755 W. 65th St. in Bedford Park, where end-to-end supply chain
solutions provider M. Block & Sons leased 341,114 SF during the third quarter
Total Sale Transactions and Price PSF
0
200
400
600
800
$20.00
$30.00
$40.00
$50.00
$60.00
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010*
Total Sales
Average Price PSF
Total Sales (Annualized)
Source: CoStar$1,000,000+ Transactions
Historical Deliveries
0 MM
5 MM
10 MM
15 MM
20 MM
25 MM
30 MM
1990
1992
1994
1996
1998
2000
2002
2004
20062007
1991
1993
1995
1997
1999
2001
2003
2005
200820092010*
Total Deliveries (SF)
Average (SF)
Source: CoStar
* total through 3Q10
* total through 3Q10
9 NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT – THIRD QUARTER 2010
effects of the fi rst two quarters of the year. By the third quarter of
2009, the outlook was far more grim, with more than negative 14
million SF of net absorption for the fi rst three quarters of the year.
Leasing activity continues to increase in both quantity and deal
size market-wide. More than a year into the economic recovery,
companies are beginning to feel demand to restock their
inventories, and are addressing their real estate expansion plans
now to take advantage of competitive rental rates and generous
concessions available in today’s market. The majority of the
quarter’s largest lease transactions (many greater than 200,000 SF
in size) were new leases, as opposed to lease renewals, aiding in
the positive absorption witnessed for the period. Sales activity is
on pace to nearly match last year’s paltry totals, but continues to
increase each quarter, with average sales price per square foot
slightly increasing after nose-diving in 2009.
Looking Forward
While it appears vacancy rates have reached their peak, minor
fl uctuations over the coming quarters may still occur as the market
responds to the sluggish economy. Port activity, imports, industrial
production, and trucking and rail volumes continue to show positive
year-to-year growth. This translates to more product fl owing
through the system and increased demand. Improvement in
Chicago’s Industrial Market will continue to accelerate throughout
2011 as the market and economy recover from the worst recession
since the Great Depression in the 1930s.
O’Hare
South Cook
I-55 Corridor
Central DuPage
Lake County
I-80/Joliet Corridor
I-88 Corridor
West Cook
North Cook
Southeast Wisconsin
Southwest Cook
Northwest Indiana
Fox Valley
Northwest Cook
McHenry County
I-90/Northwest
I-39 Corridor
I-57/Will Corridor
DeKalb County
100,509,670 SF
85,528,194 SF
80,357,318 SF
67,028,163 SF
66,750,778 SF
62,408,397 SF
61,834,957 SF
60,397,505 SF
46,032,324 SF
44,614,814 SF
39,226,488 SF
35,702,307 SF
32,089,494 SF
28,431,207 SF
25,562,283 SF
25,620,633 SF
24,053,891 SF
12,351,467 SF
6,970,869 SF
Suburban Submarkets by Size
Capitalization Rate and Properties Sold
Total Industrial Base
0
20
40
60
80
100
120
6%
7%
8%
9%
10%
11%
12%
2002
2003
2004
2005
2006
2007
2008
2009
2010
Cap Rate (%)# of Properties Sold
0.7 Billion
0.8 Billion
0.9 Billion
1.0 Billion
1.1 Billion
1.2 Billion
1.3 Billion
1990
1992
1994
1996
1998
2000
2002
2004
20062007
1991
1993
1995
1997
1999
2001
2003
2005
200820092010
Total Industrial Base (SF)
Industrial Market Trends
VacancyRate
NetAbsorption
AskingRents
Signifi cant Industrial Lease Transactions 3rd Qtr. 2010
Property Address Submarket City Leased (SF) Tenant Comments
2805 Duke Pky. I-88 Corridor Aurora 549,588 Midwest Warehouse Lease renewal
6755 W. 65th St. South Cook Bedford Park 341,114 M. Block & Sons New lease
11801 S. Central Ave. South Cook Alsip 284,356 California Cartage New lease
7557-7575 S. 78th Ave. South Cook Bridgeview 254,425 Oak Creek Distribution (HOBO) New lease
26416 Centerpoint Dr. I-80/Joliet Corridor Elwood 160,000 ITL New lease
Industrial M
arket Sum
mary
Italics denotes NAI Hiffman transaction
I l l i n o i sW i s c o n s i n
WaukeganRegional Airport
22
176
120
21
176
83
60
22
173
12
12
45
4145
41
294
94
Zion
Lake Zurich
ake
Grayslake
Highland Park
P l ti
Fox Lake
Lake Forest
Waukegan
cHenry
Vernon Hills
BuffaloGrove
MundeleinLibertyville
Gurnee
NorthChicago
Lake County
Submarket Trends
VacancyRate
NetAbsorption
AskingRents
33%
7%7% 9%
10%
11%
23%Waukegan
North Chicago
Buffalo Grove
Gurnee
Libertyville
Other Lake County Suburbs
Lake Zurich
Inventory By City
POPULATION 712,567 (est.)
2000–2009 POPULATION CHANGE +10.6% (est.)
# INDUSTRIAL BUILDINGS 930
MARKET SIZE (SF) 66,750,778
VACANCY 7,922,589 SF (11.9%)
3Q10 NET ABSORPTION -267,097
YTD NET ABSORPTION -529,531
NEW SUPPLY (SF) 0
UNDER CONSTRUCTION (SF) 214,000
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. Corporate neighbors 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 fi eld.
Vacancy and Absorption
Vacancy continued to climb through the third quarter as additional
vacancy space was added to market, the largest being ULINE leaving
397,000 SF in North Chicago for their brand new facility in Southeast
Wisconsin. The overall vacancy rate reached 11.9% by the end of
September, up from 11.5% last quarter and far above the 8.5%
recorded two years ago. Net absorption totaled negative 267,097 SF
for the quarter, bringing the tally for the fi rst three quarters of 2010 to
negative 529,531 SF.
“Vacany increased to 11.9% by the end of September, up more than 300 basis points
from 8.5% two years ago.”
Lake County Overview
-800,000
-600,000
-400,000
-200,000
0
200,000
400,000
0%
2%
4%
6%
8%
10%
12%
3Q07
4Q07
1Q08
2Q08
3Q08
1Q10
4Q08
1Q09
2Q09
3Q09
4Q09
2Q10
3Q10
Net Absorption (SF)Vacancy Rate (%)
Vacancy and Absorption
0
200,000
400,000
600,000
800,000
1,000,000
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
1Q09
2Q09
3Q09
4Q09
1Q10
2Q10
3Q10
Deliveries (SF)
Under Construction (SF)
Under Construction & Recent Deliveries
Pictured Above: 1081 Northpoint Blvd. in Waukegan, a 62,822 SF building
purchased by router bit manufacturer Onsrud Cutter in August.
11 NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT – THIRD QUARTER 2010
0
20
40
60
80
100
120
1,000 – 19,999
SF Available
20,000 – 49,999
SF Available
50,000 – 99,999
SF Available
100,000 – 199,999
SF Available
200,000+
SF Available
# of Buildings
2.1 MM
2.0 MM
2.5 MM
2.3 MM
1.0 MM1,000 – 19,999 SF Available
20,000 – 49,999 SF Available
50,000 – 99,999 SF Available
100,000 – 199,999 SF Available
200,000+ SF Available
Available Space Profi leConstruction
The only new signifi cant new construction project broke ground
late this summer off Route 83 in Grayslake, where FedEx is
building a new 214,000 SF distribution facility on 33 acres.
The new facility will be the shipping company’s second in Lake
County, where they already have a 67,550 SF truck terminal in
Zion’s Trumpet Park.
Transaction Activity
The most signifi cant sale transaction of the quarter involved
power tool bit manufacturer Onsrud Cutter purchasing the
62,822 SF building at 1081 Northpoint Blvd. in Waukegan. The
facility, built in 2001 and situated on 6 acres of land, sold for
about $65.00 PSF. The company plans to move their operations
to the building from their former Libertyville location.
Furniture polish manufacturer Weiman Products signed the
largest lease of the quarter for 64,148 SF at 1655 S. Waukegan
Rd. in Waukegan’s Amhurst Lakes Business Park. Similar in size,
Leica Microsystems leased 63,610 SF in the Aptakisic Creek
Corporate Park in Buffalo Grove. The company plans to build
out 47,000 SF of offi ce space for their headquarters operations.
Looking Forward
Vacancy rates should remain elevated in Lake County until job
growth and demand return in earnest, resulting in a sustained
period of absorption. The worst is apparently over, but the
time frame of the eventual recovery is still uncertain due to the
sluggish economy.
Signifi cant Lake County Sale Transactions 3rd Qtr. 2010
Property Address City Size (SF) Sale Price Price PSF Buyer Seller
1081 Northpoint Blvd. Waukegan 62,822 $4,100,000 $65.00 Onsrud Cutter LP Goodman Packing Equipment
191 Ambrogio Dr. Gurnee 14,095 $820,000 $58.00 Quest Products, Inc. Wayne Hummer Trust Co.
645 Heathrow Dr. Lincolnshire 71,556 $3,200,000 $45.00 Glentronics Inc. Wrightwood Capital
1260 Rowena Rd. Grayslake 33 AC $4,159,480 $126,045/acre Scannell Properties Delos LLC
Lake Co
unty Overview
Signifi cant Lake County Lease Transactions 3rd Qtr. 2010
Property Address City Leased (SF) Tenant Comments
1655 S. Waukegan Rd. Waukegan 64,148 Weiman Products Lease renewal
1700 Leider Ln. Buffalo Grove 63,610 Leica Microsystems Inc. New lease
1175 Lakeside Dr. Gurnee 59,981 Select Marketing Solutions, Inc. New lease
921 Sherwood Dr. Lake Bluff 33,700 The Garrett McKenzie Encironmental Group, Inc. New lease
570-580 Capital Dr. Lake Zurich 29,250 Continental Automotive Systems New lease
I l l i n o i sW i s c o n s i n
WestoshaAirport
KenoshaRegional
Airport
83
50
142
31
32
16541
4594
Zi
Pleasant Prairie
Kenosha
RacineSturtevantBurlington
Southeast Wisconsin
Submarket Trends
VacancyRate
NetAbsorption
AskingRents
Inventory By City
POPULATION 252,204 (est.)
2000–2009 POPULATION CHANGE +5.9% (est.)
# INDUSTRIAL BUILDINGS 522
MARKET SIZE (SF) 44,614,814
VACANCY 5,335,298 SF (12.0%)
3Q10 NET ABSORPTION 983,661
YTD NET ABSORPTION 1,893,642
NEW SUPPLY (SF) 1,000,000
UNDER CONSTRUCTION (SF) 0
The primary advantages of the Southeast Wisconsin submarket are
the availability of affordable land for “big box” development as well
as lower utility costs, property taxes and workers’ compensation
when compared to submarkets in Illinois. The Lakeview Corporate
Park in Pleasant Prairie, Wisconsin accounts for the lion’s share of our
statistical tracking in the Southeast Wisconsin industrial submarket.
This 1,500-acre business park boasts 25 million SF of industrial space
and is home to an international roster of companies including S.C.
Johnson, IRIS, Yamaha and Jelly Belly.
Vacancy and Absorption
Vacancy continued to decline in Southeast Wisconsin during the third
quarter, perpetuating a recent trend in the submarket opposite of the
majority of other industrial submarkets. Vacancy rates peaked at 14.2%
during the second quarter of 2009, and have since steadily declined,
reaching 12% at the end of September. The lower costs associated
with doing business in Southeast Wisconsin have attracted companies
looking to lower occupancy and operational costs, resulting in fi ve
consecutive quarters of positive absorption. The most recent quarter
was no exception, with absorption totalling 983,661 SF largely due to
the completion of ULINE’s new 1 million SF headquarters facility.
“Companies looking to lower occupancy and
operational costs have been attracted to Southeast Wisconsin, resulting in positive absorption.”
Southeast Wisconsin Overview
-1,000,000
-500,000
0
500,000
1,000,000
1,500,000
0%
3%
6%
9%
12%
15%
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
1Q09
2Q09
3Q09
4Q09
2Q10
3Q10
1Q10
Net Absorption (SF)Vacancy Rate (%)
Vacancy and Absorption
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
1Q09
2Q09
3Q09
4Q09
2Q10
3Q10
1Q10
Deliveries (SF)
Under Construction (SF)
Under Construction & Recent Deliveries
6%
16%
17%
27%
34%Racine
Burlington
Kenosha
Sturtevant
Pleasant Prairie
Pictured Above: 212 Hamilton St. in Racine, a 23,898 SF industrial
warehouse building purchased by Patrick O’Neil during the third quarter
13 NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT – THIRD QUARTER 2010
0
8
16
24
32
1,000 – 19,999
SF Available
20,000 – 49,999
SF Available
50,000 – 99,999
SF Available
100,000 – 199,999
SF Available
200,000+
SF Available
# of Buildings
2.3 MM
2.1 MM
1.3 MM
0.7 MM
0.3 MM
1,000 – 19,999 SF Available
20,000 – 49,999 SF Available
50,000 – 99,999 SF Available
100,000 – 199,999 SF Available
200,000+ SF Available
Available Space Profi leConstruction
Following the completion of ULINE’s new 1 million SF distribution
facility and 200,000 SF offi ce headquarters in Pleasant Prairie, no
new build-to-suit or speculative projects are under construction
in Southeast Wisconsin.
Transaction Activity
Largely composed of “big-box” distribution facilities with large
spaces catering to tenants requiring substantial square footage
for their operations, signifi cant transactions don’t occur as often
in the Southeast Wisconsin submarket due to the typical large
size of transactions and the comparatively long-term leases these
tenants sign. Following several quarters of sizeable lease and
sale transactions, several of which were hundreds of thousands
of SF in size, no signifi cant transactions occurred during the
third quarter. Instead, deals were much smaller in size, such as
the sale of a 23,898 SF building purchased by a container and
packaging company in Racine.
Looking Forward
Lower taxes, utility costs, rental rates and land values found
in Southeast Wisconsin will continue to draw companies from
south of the border. Much of the industrial inventory in the
submarket is modern, with high clear heights and excellent
loading specifi cations. These high cube properties will continue
to make Southeast Wisconsin attractive to large distributors.
So
utheast Wisco
nsin Overview
Signifi cant Southeast Wisconsin Lease Transactions 3rd Qtr. 2010
Property Address City Leased (SF) Tenant Comments
3122 14th Ave. Kenosha 20,000 Undisclosed New lease
1611-1691 Renaissance Blvd. Sturtevant 5,292 Probuild New lease
Signifi cant Southeast Wisconsin Sale Transactions 3rd Qtr. 2010
Property Address City Size (SF) Sale Price Price PSF Buyer Seller
212 Hamilton St. Racine 23,898 Undisclosed Undisclosed Patrick O’Neil 212 Hamilton LLC
72
2531
31
4720
90
South Elgin
EastDundee
Elgin
Hampshire Carpentersville
I-90/Northwest
Submarket Trends
NetAbsorption
AskingRents
Inventory By City
POPULATION 211,130 (est.)
2000–2009 POPULATION CHANGE +25.4% (est.)
# INDUSTRIAL BUILDINGS 430
MARKET SIZE (SF) 25,620,633
VACANCY 2,792,342 SF (10.9%)
3Q10 NET ABSORPTION 195,591
YTD NET ABSORPTION 29,522
NEW SUPPLY (SF) 0
UNDER CONSTRUCTION (SF) 52,000
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 a 4-way
intersection 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. Relatively low taxes are a benefi t
throughout the submarket and TIF incentives are available in some
areas. 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 76% of the total
submarket inventory is located in Elgin.
Vacancy and Absorption
Following the trend of the overall industrial market, vacancy decreased
during the third quarter to 10.9%, down from the 11.7% rate witnessed
during the past two quarters. Increased transaction velocity and fewer
new vacancies being introduced to the market resulted in the decrease
in the vacancy rate and positive absorption totaling 195,591 SF for the
quarter. Vacancy in the I-90/Northwest submarket has held between
10% and 12% for the past two years.
“Increased transaction velocity and fewer new vacancies resulted in decreased vacancy and
positive absorption.”
I-90/Northwest Overview
-400,000
-200,000
0
200,000
400,000
0%
3%
6%
9%
12%
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
1Q09
2Q09
2Q10
3Q10
1Q10
3Q09
Net Absorption (SF)Vacancy Rate (%)4Q
09
Vacancy and Absorption
0
250,000
500,000
750,000
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
1Q09
2Q09
3Q09
4Q09
2Q10
3Q10
1Q10
Deliveries (SF)
Under Construction (SF)
Under Construction & Recent Deliveries
VacancyRate
9%3%
5%
7%
76%
Elgin
Dundee, Genoa, Marengo, Hampshire, etc.
East Dundee
South Elgin
Carpentersville
Pictured Above: 2700 Alft Ln., Elgin, where grill manufacurer
Weber-Stephen Products Co. has leased 174,212 SF
15 NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT – THIRD QUARTER 2010
0
10
20
30
40
50
1,000 – 19,999
SF Available
20,000 – 49,999
SF Available
50,000 – 99,999
SF Available
100,000 – 199,999
SF Available
200,000+
SF Available
# of Buildings
0.3 MM
0.6 MM
0.9 MM
0.9 MM
0.5 MM1,000 – 19,999 SF Available
20,000 – 49,999 SF Available
50,000 – 99,999 SF Available
100,000 – 199,999 SF Available
200,000+ SF Available
Available Space Profi leConstruction
The only building under construction in the submarket remains a
52,000 SF speculative project on North Lancaster Road in South
Elgin. Scheduled to deliver during the fourth quarter of the year,
8,000 SF of the building is pre-leased. Otherwise, construction
will likely remain limited until demand returns in earnest.
Transaction Activity
Transaction activity picked up during the third quarter. In the
largest lease of the quarter, grill manufacturer Weber-Stephen
Products Co., better known as Weber Grill, leased 174,212
SF of space in Elgin’s Randall Crossings Business Park. The
new lease adds to their footprint in the submarket, where the
expanding company signed a lease for over 250,000 SF a year
ago. Wind turbine manufacturer Suzlon leased 62,792 SF in
Elgin’s Northwest Corporate Park X, a 250,3000 SF warehouse
building constructed in 2001.
Rubber products supplier Ebco Inc. purchased a 51,000 SF
building located at 1330 Holmes Rd. in Elgin from American
Chartered Bank for about $29.00 PSF. Their current 12,000
SF facility at 1371 Brummel Ave. in Elk Grove Village is on the
market for sale.
Looking Forward
The I-90/Northwest submarket will remain an attractive location
for businesses due to the lower tax base, strong labor pool
and interstate access. Tenants will continue to fi nd leasing
opportunities such as incentives and aggressive rates.
Signifi cant I-90/Northwest Sale Transactions 3rd Qtr. 2010
Property Address City Size (SF) Sale Price Price PSF Buyer Seller
1330 Holmes Rd. Elgin 51,000 $1,490,000 $29.00 Ebco, Inc. American Chartered Bank
I-90/No
rthwest O
verview
Signifi cant I-90/Northwest Lease Transactions 3rd Qtr. 2010
Property Address City Leased (SF) Tenant Comments
2700 Alft Ln. Elgin 174,212 Weber-Stephen Products Co. New lease
2581-2589 Technology Dr. Elgin 62,792 Suzlon New lease
1360 Madeline Dr. Elgin 41,447 Top Flight Volleyball New lease
1600 Big Timber Rd. Elgin 40,872 Private partnership New lease
OhareInt'l Airport
Chicago Executive
Airport
53
72
68
62
58
19
59 12
14
20
355
290
294
90
Elk Grove Village
Lake Zurich
Arlington Heights
gin
F kli
Palatine
Schaumburg Des Plaines
Bloomingdale
EastDundee
gin
BuffaloGrove
Wood Dale
Streamwood
Barrington
HoffmanEstates
Mt. Prospect
Bartlett
Northwest Cook
Submarket Trends
NetAbsorption
AskingRents
Inventory By City
POPULATION 517,239 (est.)
2000–2009 POPULATION CHANGE +0.3% (est.)
# INDUSTRIAL BUILDINGS 525
MARKET SIZE (SF) 28,431,207
VACANCY 3,298,303 SF (11.6%)
3Q10 NET ABSORPTION 113,182
YTD NET ABSORPTION 326,375
NEW SUPPLY (SF) 0
UNDER CONSTRUCTION (SF) 0
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 distribution facilities exist relative
to neighboring submarkets. Many users come from the comparatively
cramped O’Hare submarket looking for more space or a location closer
to their residences, but don’t want to move all the way west to Elgin
or beyond. While high Cook County taxes may be prohibitive to some
users, landlords continue to offer lower net rents to attract tenants.
Vacancy and Absorption
Vacancy continued to decline throughout the Northwest Cook
submarket through the third quarter as transactional activity outweighed
the effects of few new signifi cant vacancies being added to the market.
The overall vacancy rate dipped to 11.6% by the end of September,
marking the fourth consecutive quarter of declining vacancy rates, a
“The vacancy rate dipped to 11.6%, marking the fourth consecutive quarter of declining
vacancy rates.”
Northwest Cook Overview
-750,000
-500,000
-250,000
0
250,000
500,000
750,000
0%
3%
6%
9%
12%
15%
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
1Q08
2Q09
3Q09
Net Absorption (SF)Vacancy Rate (%)4Q
09
2Q10
3Q10
1Q10
Vacancy and Absorption
0
100,000
200,000
300,000
400,000
500,000
2Q07
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
1Q09
2Q09
3Q09
4Q09
2Q10
1Q10
Deliveries (SF)
Under Construction (SF)
Under Construction & Recent Deliveries
VacancyRate
14%
7%
7%
10%
15%19%
28%Schaumburg
Bartlett, Hoffman Estates, Roling Meadows, etc.
Palatine
Mt. Prospect
Northlake
Barrington
Streamwood
Pictured Above: 1900-2000 S. Carboy Rd., Mt. Prospect, purchased by
Chicago-based Brennan Investment Group during the third quarter
17 NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT – THIRD QUARTER 2010
0
15
30
45
60
75
1,000 – 19,999
SF Available
20,000 – 49,999
SF Available
50,000 – 99,999
SF Available
100,000 – 199,999
SF Available
200,000+
SF Available
# of Buildings
1.0 MM
1.4 MM1.0 MM
0.9 MM
0.6 MM1,000 – 19,999 SF Available
20,000 – 49,999 SF Available
50,000 – 99,999 SF Available
100,000 – 199,999 SF Available
200,000+ SF Available
Available Space Profi letrend opposite to other area submarkets that have witnessed
several quarters of rising vacancy rates. Net absorption was
positive, totaling 113,182 SF for the quarter, bringing the 2010
tally year-to-date to 326,375 SF.
Construction
Largely a developed “infi ll market”, the majority of construction
projects are building additions, but these have been few and far
between due to economic concerns and limited fi nancing.
Transaction Activity
The Chicago-based private investment fi rm Brennan Investment
Group acquired a 217,000 SF building on Carboy Rd. in Mt.
Prospect this September. The building, built in the 1980s, was
partially leased at the time of the sale.
Part of a seven property portfolio sale, private equity real estate
investment fi rm High Street Equity Advisors, LLC purchased the
59,500 SF industrial warehouse building located at 901 Phoenix
Lake Ave. in Streamwood from Boston-based TA Associates
Realty for about $66.00 PSF.
Looking Forward
Although improvements have been witnessed in the Northwest
Cook submarket during recent quarters, vacancy will remain in
the double-digits for the foreseeable future until job growth and
consumer buying power increase demand market-wide. Until
demand returns, landlords will continue to push aggressive rental
rates and signifi cant concession packages for tenants.
Signifi cant Northwest Cook Sale Transactions 3rd Qtr. 2010
Property Address City Size (SF) Sale Price Price PSF Buyer Seller
1900-2000 S. Carboy Rd. Mt. Prospect 217,000 Undisclosed Undisclosed Brennan Investment Group Principal Financial Group
901 Phoenix Lake Ave. Streamwood 59,500 $3,950,000 $66.00 High Street Equity Advisors TA Associates Realty
No
rthwest C
oo
k Overview
Signifi cant Northwest Cook Lease Transactions 3rd Qtr. 2010
Property Address City Leased (SF) Tenant Comments
707 Remington Rd. Schaumburg 5,000 Fireguy Graphics New lease
3701 Berdnick St. Rolling Meadows 3,006 Luxury Auto Group Inc. New lease
OhareInt'l Airport
ago ExecutiveAirport
43
21
58
68
4114
294
94
90
Glencoe
e
n s
Skokie
Northbrook
Park Ridge
NilesDes Plaines
Grove
Lincolnwood
MortonGrove Evanston
Wheeling
Chicago
North Cook
Submarket Trends
NetAbsorption
AskingRents
Inventory By City
POPULATION 415,646 (est.)
2000–2009 POPULATION CHANGE +2.1% (est.)
# INDUSTRIAL BUILDINGS 714
MARKET SIZE (SF) 46,032,324
VACANCY 3,563,057 SF (7.7%)
3Q10 NET ABSORPTION -253,485
YTD NET ABSORPTION -1,048,697
NEW SUPPLY (SF) 0
UNDER CONSTRUCTION (SF) 0
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 specifi cations
than many of the antiquated buildings found in the city of Chicago.
It tends to be a primarily user/buyer 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 and Absorption
Vacancy decreased slightly during the third quarter for the fi rst time
in two years. The vacancy rate fell to 7.7% by the end of September,
but still remains elevated well above the rates seen at this time last
year and especially two years ago. Net absorption, normally inversely
related to the vacancy trend, was negative for the quarter due to the
“Historically an owner-user submarket, vacancy rates have not reached levels
experienced in neighboring submarkets.”
North Cook Overview
-500,000
-300,000
-100,000
100,000
300,000
500,000
0%
2%
4%
6%
8%
10%
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
1Q09
2Q09
3Q09
Net Absorption (SF)Vacancy Rate (%)4Q
09
2Q10
3Q10
1Q10
Vacancy and Absorption
14%
8%
13%
17%20%
28%Wheeling
Evanston, Glenview, Lincolnwood, Northfield, etc.
Northbrook
Skokie
Niles
Morton Grove
VacancyRate
Pictured Above: 92-154 Messner Dr., Wheeling purchased in an
investment sale by ATG Trust Company during the third quarter
19 NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT – THIRD QUARTER 2010
0
20
40
60
80
100
1,000 – 19,999
SF Available
20,000 – 49,999
SF Available
50,000 – 99,999
SF Available
100,000 – 199,999
SF Available
200,000+
SF Available
# of Buildings
0.2 MM
1.7 MM
1.3 MM
1.1 MM
0.8 MM1,000 – 19,999 SF Available
20,000 – 49,999 SF Available
50,000 – 99,999 SF Available
100,000 – 199,999 SF Available
200,000+ SF Available
Available Space Profi ledemolition of a couple buildings in the submarket affecting the
total inventory.
Construction
The North Cook submarket has experienced very little new
development in recent years due to its status as a mature market.
Transaction Activity
Deals were limited to smaller spaces during the third quarter.
Clock parts manufacturer Timetek Corp. purchased a 35,682
SF warehouse building in Skokie for about $50.00 PSF and
expanded their business by relocating from a 11,500 SF building
in Harwood Heights.
Classic car refurbisher RPM Redline leased 34,350 SF at 6143
W. Howard St. in Niles. The deal was an “as-is” transaction.
Also leasing space, Hasley Warehousing and Distribution leased
26,316 SF in Morton Grove during the third quarter. The food
distributor built out two offi ces and a conference room as part of
the transaction.
Looking Forward
Vacancy rates are likely near their peak in the North Cook
submarket, but should remain elevated over the coming quarters
until confi dence in the economy improves, driving industrial
production and demand. Historically an owner-user submarket,
area vacancy rates have not reached levels experienced in
neighboring submarkets where large institutionally-owned multi-
tenant buildings prevail.
Signifi cant North Cook Sale Transactions 3rd Qtr. 2010
Property Address City Size (SF) Sale Price Price PSF Buyer Seller
92-154 Messner Dr. Wheeling 62,229 $2,068,000 $33.00 ATG Trust Company Chicago Title Trust Company
6666 W. Howard St. Niles 50,256 $2,300,000 $46.00 Angelo D’Angelov Oakley Industries, Inc.
7650 Austin Ave. Skokie 35,682 $1,800,000 $50.00 Timetek Corp. Erell Manufacturing
201-203 Northfield Rd. Northfield 20,055 $1,835,000 $92.00 Fidelity Energy, LP Josephine Louis
No
rth Co
ok O
verview
Signifi cant North Cook Lease Transactions 3rd Qtr. 2010
Property Address City Leased (SF) Tenant Comments
6143 W. Howard St. Niles 34,350 RPM Redline New lease
8220 N. Austin Ave. Morton Grove 26,316 Hasley Warehousing and Distribution New lease
7007 Austin Ave. Niles 21,682 Intelligent Spaces by Design, LLC New lease
2165 Shermer Rd. Northbrook 11,283 Undisclosed New lease
811 St. Louis Ave. Skokie 10,553 Mounsef International New lease
DupageAirport
31
25
64
38
59
64
3847
30
88
Aurora
Batavia
South Elgin
Naperville
North Aurora
St Charles
West ChicagoCa
Sugar Grove
Elgin
Geneva
Streamwoo
Fox Valley
Submarket Trends
NetAbsorption
AskingRents
Inventory By City
POPULATION 115,494 (est.)
2000–2009 POPULATION CHANGE +37.8% (est.)
# INDUSTRIAL BUILDINGS 495
MARKET SIZE (SF) 32,089,494
VACANCY 3,930,949 SF (12.2%)
3Q10 NET ABSORPTION -128,882
YTD NET ABSORPTION -186,501
NEW SUPPLY (SF) 0
UNDER CONSTRUCTION (SF) 0
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
limited 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. Many users
choose to be in the Fox Valley submarket due to need and remain in
the submarket long-term, resulting in limited transaction velocity.
Vacancy and Absorption
The Fox Valley’s vacancy rate climbed above 12% during the third
quarter for the fi rst time in the submarket’s history. The rate had been
hovering around the 12% for the past several quarters, but a handful
of new vacancies and net absorption totaling negative 128,882 SF for
the quarter was enough to push it to 12.2% by the end of September.
Although vacancy has reached a new high point, demand is typically
limited in the Fox Valley submarket, and large swings aren’t common.
“Negative net absorption and new vacancies pushed the Fox Valley’s
vacancy rate above 12% for the fi rst time in the submarket’s history.”
Fox Valley Overview
-800,000
-600,000
-400,000
-200,000
0
200,000
400,000
0%
3%
6%
9%
12%
15%
18%
4Q09
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
1Q09
2Q09
3Q09
2Q10
1Q10
3Q10
Net Absorption (SF)Vacancy Rate (%)
Vacancy and Absorption
0
100,000
200,000
300,000
400,000
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
1Q09
2Q09
3Q09
4Q09
2Q10
3Q10
1Q10
Deliveries (SF)
Under Construction (SF)
Under Construction & Recent Deliveries
11%
26%
28%
35% West Chicago
Geneva
Batavia
St. Charles
VacancyRate
Pictured Above: 525 Shingle Oak Dr., West Chicago, purchased by KTR Capital Partners
during the third quarter and subsequently leased to McCollister’s Transportation Group, Inc.
21 NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT – THIRD QUARTER 2010
0
20
40
60
80
1,000 – 19,999
SF Available
20,000 – 49,999
SF Available
50,000 – 99,999
SF Available
100,000 – 199,999
SF Available
200,000+
SF Available
# of Buildings
0.8 MM
1.4 MM
0.8 MM
1.0 MM
0.7 MM1,000 – 19,999 SF Available
20,000 – 49,999 SF Available
50,000 – 99,999 SF Available
100,000 – 199,999 SF Available
200,000+ SF Available
Available Space Profi leConstruction
Due to the relatively large amount of vacant space on the market,
negative absorption trends and limited access to the area, new
development projects have been nonexistent. As the market
begins to turn around and vacant space is gradually absorbed,
construction activity will eventually pick up in and around
communities west of the Fox River, as few industrial-zoned land
sites remain near the river.
Transaction Activity
Real estate services and investment company JSQ Commercial
LLC acquired a 146,000 SF manufacturing building in St. Charles
for $7.125 million during the third quarter from global investment
management company Invesco. Private equity fund manager
KTR Capital Partners purchased an 150,000 SF industrial
building in West Chicago’s Crossroads of DuPage business park
for $3.9 million. The transaction also included a neighboring
11.6-acre parcel of land and two industrial condominium units
totaling 6,491 SF. The original asking price was $9.75 million. As
part of the same transaction, KTR was able to secure a long-term
lease from McCollister’s Transportation Group in the 150,000 SF
building located at 525 Shingle Oak Drive.
Looking Forward
Vacancy is likely near its peak and should level off over the
coming quarters, but will remain elevated until demand returns
in earnest. Transaction velocity is typically low in the Fox Valley
submarket, so it may take longer for conditions to improve
compared to the characteristically more active submarkets.
Signifi cant Fox Valley Sale Transactions 3rd Qtr. 2010
Signifi cant Fox Valley Lease Transactions 3rd Qtr. 2010
Property Address City Leased (SF) Tenant Comments
525 Shingle Oak Dr. West Chicago 150,000 McCollister’s Transportation Group, Inc. New lease
701 N. Raddant Rd. Batavia 27,000 BCT Printing New lease
900-940 Paramount Pky. Batavia 7,500 Batavia Youth Baseball New lease
1183 Pierson Dr. Batavia 5,900 Fastenal New lease
Property Address City Size (SF) Sale Price Price PSF Buyer Seller
3825 Ohio Ave. St. Charles 146,000 $7,125,000 $49.00 JSQ Commercial, LLC Invesco
Multi-property sale West Chicago 156,491 $3,899,000 N/A KTR Capital Partners TCB Development
555 Kirk Rd. St. Charles 62,400 $3,419,520 $55.00 Kristel Corporation ML Realty Partners
1100 Kingsland Dr. Batavia 52,475 $2,650,000 $51.00 Gibraltar Properties Group Hopper Investment Inc.
Fo
x Valley Overview
OhareInt'l Airport
53
19
64
83
53
20
294
88
355
290
Elk Grove Village
Addison
Schaumburg
Bloomingdale
est ChicagoCarol Stream
Elmhurst
W
LombardGlen Ellyn
GlendaleHeights
Central DuPage
Submarket Trends
NetAbsorption
AskingRents
Inventory By City
POPULATION 393,753 (est.)
2000–2009 POPULATION CHANGE +1.1% (est.)
# INDUSTRIAL BUILDINGS 1,098
MARKET SIZE (SF) 67,028,163
VACANCY 6,846,528 SF (10.2%)
3Q10 NET ABSORPTION 131,055
YTD NET ABSORPTION 54,578
NEW SUPPLY (SF) 0
UNDER CONSTRUCTION (SF) 0
The well-positioned Central DuPage industrial submarket benefi ts from
advantages including relatively low taxes, newer building inventory and
an educated workforce. The recent 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.
Vacancy and Absorption
The uptick in transactional activity witnessed in the Central DuPage
submarket over the past few quarters has helped to stabilize the
vacancy rate. Vacancy decreased during the second quarter, ending
September with a rate of 10.2%, down slightly from 10.4% last quarter
and comparable to the 10.3% rate witnessed a year ago. The active
marketplace pushed net absorption positive for the quarter, totaling
131,055 SF, and bringing the year-to-date tally to 54,578 SF.
Construction
New development will be limited as very little land remains for new
speculative construction in the submarket. Construction projects are
limited to building renovations and expansions.
“Vacancy in the submarket has likely peaked and will begin to improve as elevated transactional
activity continues and demand picks up.”
Central DuPage Overview
-800,000
-400,000
0
400,000
800,000
1,200,000
0%
3%
6%
9%
12%
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
1Q09
2Q09
3Q09
2Q10
1Q10
3Q10
Net Absorption (SF)Vacancy Rate (%)4Q
09
Vacancy and Absorption
0
100,000
200,000
300,000
400,000
500,000
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
1Q09
2Q09
3Q09
4Q09
2Q10
3Q10
1Q10
Deliveries (SF)
Under Construction (SF)
Under Construction & Recent Deliveries
18%
7%
9%
10% 29%
27%Addison
Hanover Park
Elmhurst
Glendale Heights
Carol Stream
Bloomingdale, Lombard, Roselle, Vill Park, Wheaton
VacancyRate
Pictured Above: 1150 N. Swift Rd., Addison, where restaurant equipment
parts supplier Parts Town leased 63,455 SF during the third quarter
23 NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT – THIRD QUARTER 2010
0
30
60
90
120
150
1,000 – 19,999
SF Available
20,000 – 49,999
SF Available
50,000 – 99,999
SF Available
100,000 – 199,999
SF Available
200,000+
SF Available
# of Buildings
2.3 MM
1.2 MM
2.2 MM
1.9 MM
1.1 MM1,000 – 19,999 SF Available
20,000 – 49,999 SF Available
50,000 – 99,999 SF Available
100,000 – 199,999 SF Available
200,000+ SF Available
Available Space Profi leTransaction Activity
The most signifi cant sale of the quarter involved manufacturing
company Startex Industries purchasing a 54,770 SF building in
Addison from Vacumet, a subsidiary of the Schoelle Corporation
for about $56.00 PSF. Shoelle, a packaging supply manufacturer
closed their Addison Vacumet location and a location in New
Jersey, consolidating operations at their Austell, Georgia location.
The company is headquartered in nearby Northlake.
The largest lease transaction of the quarter was the long term
lease of 63,455 SF at 1150 N. Swift Rd. in Addison from Dallas-
based landlord Lincoln Property Company. The restaurant
equipment parts provider Parts Town will use the space for storage
and distribution throughout the local market. Computer and
equipment dealer COM2 Computers & Technologies LLC signed
a lease for 52,218 SF at 140 E. Fullerton Ave. in Carol Stream.
The landlord of the property is Finch & Barry Properties, LLC.
Looking Forward
Vacancy in the submarket has likely peaked and will begin to
recover as elevated transactional activity continues and demand
picks up. As companies become increasingly confi dent in the
eventual economic recovery, they will begin to readdress their
real estate expansion needs. The advantageous location of
the Central DuPage submarket, combined with its variety of
industrial product, ensure the submarket will be quick respond
to improving economic conditions and industry expansion, and
one of the fi rst to recover.
Signifi cant Central DuPage Sale Transactions 3rd Qtr. 2010
Signifi cant Central DuPage Lease Transactions 3rd Qtr. 2010
Property Address City Size (SF) Sale Price Price PSF Buyer Seller
31 Mitchell Ct. Addison 54,770 $3,087,000 $56.00 Startex Industries Inc. Schoelle Corporation
455 W. Kay Ave. Addison 20,880 $1,350,000 $65.00 David Hennicke Not listed
1220 Capitol Dr. Addison 15,500 $1,256,500 $81.00` Gelatin Innovations, Inc. Colony Capital
Central D
uPag
e Overview
Property Address City Leased (SF) Tenant Comments
1150 N. Swift Rd. Addison 63,455 Parts Town New lease
140 E. Fullerton Ave. Carol Stream 52,218 COM2 Computers & Technologies, LLC New lease
945 N. Larch Ave. Elmhurst 51,023 Garland Converting New lease
50 W. North Ave. Lombard 48,000 Overton Gear & Tool New lease
146 Alexandra Way Carol Stream 42,341 Target Marketing Lease renewal
50 Commercial Ave. Addison 37,500 Great Kitchens, Inc. New lease
Italics denotes NAI Hiffman transaction
OhareInt'l Airport
83
19
72
45
355290 294
90
Elk Grove Village
Addison
Heights
Park Ridge
Franklin Park
Bensenville
Nmburg Des Plaines
ngdale
Elmhurst Melrose
MortoGrov
Wood Dale
daleghts
Itasca
O’Hare
Submarket Trends
NetAbsorption
AskingRents
Inventory By City
POPULATION 136,517 (est.)
2000–2009 POPULATION CHANGE -2.6% (est.)
# INDUSTRIAL BUILDINGS 1,725
MARKET SIZE (SF) 100,509,670
VACANCY 12,837,390 SF (12.8%)
3Q10 NET ABSORPTION -309,760
YTD NET ABSORPTION -1,325,594
NEW SUPPLY (SF) 0
UNDER CONSTRUCTION (SF) 0
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 fl ex space. Many of the buildings in the
submarket are older and functionally obsolete. Redevelopment and
construction has slowed dramatically since the economic downturn
took hold in 2008.
Vacancy and Absorption
The O’Hare vacancy rate was unchanged in the third quarter, with
12.8% of space in submarket vacant at the end of September, the
same percentage posted last June. While the vacancy rate didn’t
change, net absorption totaled negative 309,760 SF for the quarter,
largely due to the demolition of a handful of buildings in the submarket,
including several industrial buildings on O’Leary Drive in Bensenville.
The buildings were leveled to make way for the eventual relocation
of Irving Park Road to the south of the recently demolished industrial
park, as part of the O’Hare Modernization Program.
“Vacancy is likely near its peak in the O’Hare submarket but will only slowly improve until the economy and demand signifi cantly rebound.”
O’Hare Overview
-1,500,000
-800,000
-100,000
600,000
1,300,000
2,000,000
0%
3%
6%
9%
12%
15%
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
1Q09
2Q09
3Q09
4Q09
2Q10
3Q10
1Q10
Net Absorption (SF)Vacancy Rate (%)
Vacancy and Absorption
0
200,000
400,000
600,000
800,000
3Q07
4Q07
1Q08
2Q09
3Q08
4Q08
1Q09
2Q09
3Q09
4Q09
2Q10
3Q10
1Q10
Deliveries (SF) Under Construction (SF)
Under Construction & Recent Deliveries
1%9%
11%
18%
18%
42%
Elk Grove Village
Wood Dale
Itasca
Bensenville
Des Plaines
Rosemont
VacancyRate
Pictured Above: 560-590 Supreme Dr. in the Bensenville Industrial Park,
where Henderson Transport Inc. leased 115,000 SF during the third quarter
25 NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT – THIRD QUARTER 2010
0
50
100
150
200
250
1,000 – 19,999
SF Available
20,000 – 49,999
SF Available
50,000 – 99,999
SF Available
100,000 – 199,999
SF Available
200,000+
SF Available
# of Buildings
2.7 MM
4.9 MM
4.5 MM
3.4 MM
2.1 MM1,000 – 19,999 SF Available
20,000 – 49,999 SF Available
50,000 – 99,999 SF Available
100,000 – 199,999 SF Available
200,000+ SF Available
Available Space Profi leConstruction
Development activity, so prevalent a few years ago, has come to
a standstill in the submarket. Many of the projects completed
during recent years were speculative facilities, and they still sit
vacant today due to depressed demand and low rental rates.
Transaction Activity
Printer cartridge manufacturer RPT Toner, Inc. purchased the the
50,000 SF building located at 475 Supreme Dr. in Bensenville
in August for $2.75 million. The building had been vacant and
available on the market for 18 months prior to the sale. The buyer
is in the process of building out the space prior to moving in.
The largest leases of the third quarter involved trucking company
Henderson Transport Inc. leasing 115,000 SF in the Bensenville
Industrial Park and the third-party logistics arm of FedEx Corp.
leasing 104,619 SF in Elk Grove Village. Color Concepts also
leased the full 93,380 SF building at 1201 Kirk St. in the Elk Grove
Industrial Park.
Looking Forward
Vacancy is likely near its peak in the O’Hare submarket and will
slowly begin to improve over coming quarters, but should remain
elevated until the economy signifi cantly rebounds and demand
returns. The premier location of the submarket close to O’Hare
International Airport with easy access to the nation’s longest
interstate highway (I-90) and several other area expressways,
will help the submarket bounce back more readily than other
submarkets.
Signifi cant O’Hare Sale Transactions 3rd Qtr. 2010
Signifi cant O’Hare Lease Transactions 3rd Qtr. 2010
Property Address City Leased (SF) Tenant Comments
560-590 Supreme Dr. Bensenville 115,000 Henderson Tranport Inc. New lease
1001 Busse Rd. Elk Grove Village 104,619 FedEx Corp. New lease
1201 Kirk St. Elk Grove Village 93,380 Color Concepts New lease
595-601 Supreme Dr. Bensenville 63,618 Shenkers International Forwarders New lease
1120-1144 Ellis St. Bensenville 59,372 KW International New lease
Property Address City Size (SF) Sale Price Price PSF Buyer Seller
475 Supreme Dr. Bensenville 50,000 $2,750,000 $55.00 RPT Toner, Inc. Value Industrial Partners
2020 Touhy Ave. Elk Grove Village 35,000 $1,312,500 $38.00 Permatron Corporation Derrick Hesser
O’H
are Overview
Italics denotes NAI Hiffman transaction
OhareInt'l Airport
64
19
43
45
20
290
29494
90
90
290
k Grove Village
Skokie
Oak Park
Franklin Park
Bensenville
Niles
Elmhurst MelrosePark
Bellwood
SchillerPark
Chicago
West Cook
Submarket Trends
NetAbsorption
AskingRents
Inventory By City
POPULATION 244,228 (est.)
2000–2009 POPULATION CHANGE -4.4% (est.)
# INDUSTRIAL BUILDINGS 741
MARKET SIZE (SF) 60,397,505
VACANCY 7,069,207 SF (11.7%)
3Q10 NET ABSORPTION 332,212
YTD NET ABSORPTION 76,474
NEW SUPPLY (SF) 0
UNDER CONSTRUCTION (SF) 0
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 benefi ts 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 and Absorption
After briefl y peaking above 12% last quarter, the West Cook vacancy
rate dipped again during the third quarter to 11.7%, a rate similar to
the same time a year ago. The vacancy rate responded quickly to
the economic downturn in the second half of 2008, rising from 8% to
nearly 12% in less than a year. It has held around that 12% rate ever
since. Net absorption was positive for the quarter, totaling 332,212
SF for the period between July and September, the most signifi cant
positive traction witnessed in the submarket in more than two years.
“Net absorption was positive between July and September, marking the most signifi cant quarter
of improvement in more than two years.”
West Cook Overview
-1,500,000
-1,000,000
-500,000
0
500,000
1,000,000
0%
3%
6%
9%
12%
15%
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
1Q09
2Q09
3Q09
2Q10
2Q10
3Q10
Net Absorption (SF)Vacancy Rate (%)4Q
09
Vacancy and Absorption
0
200,000
400,000
600,000
800,000
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
1Q09
2Q09
3Q09
4Q09
2Q10
3Q10
1Q10
Deliveries (SF)
Under Construction (SF)
Under Construction & Recent Deliveries
12%
5%
8%
9%
29%
37%
Franklin Park
Harwood Heights, Hillside, Maywood, Norridge, River Grove
Schiller Park
Bellwood
Melrose Park
Berkeley
VacancyRate
Pictured Above: 4201 Raymond Dr., Franklin Park, purchased by automotive parts
remanufacturer Dynamic Manufacturing Corporation during the third quarter
27 NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT – THIRD QUARTER 2010
0
10
20
30
40
50
1,000 – 19,999
SF Available
20,000 – 49,999
SF Available
50,000 – 99,999
SF Available
100,000 – 199,999
SF Available
200,000+
SF Available
# of Buildings
2.8 MM
3.0 MM
2.4 MM
1.4 MM
0.4 MM
1,000 – 19,999 SF Available
20,000 – 49,999 SF Available
50,000 – 99,999 SF Available
100,000 – 199,999 SF Available
200,000+ SF Available
Available Space Profi leConstruction
The most desirable development property in the submarket sits
just south of O’Hare International Airport and was the former
home to Central Grocers 800,000 SF facility. Molto Capital LLC
purchased the site this past June and is waiting for a build-to-suit
opportunity. The 25-acre property can accommodate a building
up to 700,000 SF in size.
Transaction Activity
The most signifi cant sale transaction of the quarter involved
Dynamic Manufacturing Corporation, a remanufacturer of
torque converters and automotive transmissions, purchasing
the 173,000 SF building located at 4201 Raymond Dr. in Hillside.
The seller, book and magazine distributor Chas. Levy Circulating
Company, moved out of the facility more than two years ago
when they leased space in the I-55 submarket. The building had
been vacant since. Dynamic Manufacturing plans to consolidate
their locations into the Hillside building over the next few years.
Metal bookcase and stereo cabinet manufacturer Metal Box
International leased 90,097 SF at 3400 Powell St. in Franklin
Park, expanding their operations in the area.
Looking Forward
Plagued by high vacancy, the West Cook and O’Hare submarkets
will continue to experience the same vacancy concerns until
demand picks up and institutional owners respond to the market
by leasing spaces in their buildings at a discount.
West C
oo
k Overview
Signifi cant West Cook Sale Transactions 3rd Qtr. 2010
Property Address City Size (SF) Sale Price Price PSF Buyer Seller
4201 Raymond Dr. Hillside 173,000 $4,000,000 $23.00 Dynamic Manufacturing, Inc. Chas. Levy Circulating Company
Signifi cant West Cook Lease Transactions 3rd Qtr. 2010
Property Address City Leased (SF) Tenant Comments
3400 Powell St. Franklin Park 90,097 Metal Box International Lease renewal
2407-2457 W. North Ave. Melrose Park 49,763 WEG Electric Motors Corporation New lease
9501-9503 Winona Ave. Schiller Park 17,779 LAS Hardwoods Inc. New lease
5200 Proviso Dr. Melrose Park 10,080 Maritime Delivery Services New lease
3701-3749 N. 25th Ave. Schiller Park 9,257 Medtronic New lease
Italics denotes NAI Hiffman transaction
DupageAirport
56
2531 59
59
53
8356
3430
30
55
294
88
355
290
Aurora
MontgomeryWoodridge
Batavia
Naperville
North Aurora
St Charles
West ChicagoCarol Stream
Bolingbrook
Sugar Grove
Elmhurst
DownersGrove
Oak Brook
Lisle
I-88 Corridor
Submarket Trends
NetAbsorption
AskingRents
Inventory By City
POPULATION 557,546 (est.)
2000–2009 POPULATION CHANGE +21.2% (est.)
# INDUSTRIAL BUILDINGS 771
MARKET SIZE (SF) 61,834,957
VACANCY 7,769,179 SF (12.6%)
3Q10 NET ABSORPTION 363,396
YTD NET ABSORPTION 989,967
NEW SUPPLY (SF) 0
UNDER CONSTRUCTION (SF) 0
The I-88 Corridor industrial submarket has witnessed increased
demand and speculative development during the past few years,
due to the lack of land for development in feeder submarkets such
as Central DuPage and West Cook. Developers were drawn to the
large available land sites and easy access to major expressways that
the I-88 submarket has to offer. This rapid pace of development has
slowed over the past couple years as obtaining project fi nancing has
become diffi cult, vacancy has increased and demand has been limited.
Vacancy and Absorption
Vacancy improved again for the third consecutive quarter, dropping
to 12.6% at the end of September, down 60 basis points from last
quarter’s rate of 13.2%. At its peak at the end of 2009, vacancy had
reached more than 14%, a steep climb from the 8.2% witnessed before
the economic downturn began in early 2008. Net absorption was once
again positive for the quarter, totaling 363,936 SF, bringing the year-to-
date tally to nearly 1 million SF of positive absorption.
Construction
New construction activity in the I-88 Corridor is limited to the potential
construction of a new warehouse facility for U.S. Foodservice.
“Net absorption was positive for the third consecutive quarter, pushing the year-to-date
absorption tally to nearly 1 million SF.”
I-88 Corridor Overview
-1,000,000
-600,000
-200,000
200,000
600,000
1,000,000
0%
3%
6%
9%
12%
15%
3Q07
4Q07
1Q08
2Q08
3Q08
2Q10
3Q10
1Q10
4Q08
1Q09
2Q09
3Q09
Net Absorption (SF)Vacancy Rate (%)4Q
09
Vacancy and Absorption
0
250,000
500,000
750,000
1,000,000
1,250,000
1,500,000
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
1Q09
2Q09
3Q09
4Q09
2Q10
3Q10
1Q10
Deliveries (SF) Under Construction (SF)
Under Construction & Recent Deliveries
17%
7%
15%
18%
43%
Aurora
Oswego, Westmont, North Aurora, Hinsdale, Lisle, etc.
Downers Grove
Montgomery
Naperville
VacancyRate
Pictured Above: 2380 Diehl Rd., in Aurora, purchased by Jel Sert in July, will allow the
dessert and beverage manufacturer to expand their warehousing operations in the area
29 NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT – THIRD QUARTER 2010
0
20
40
60
80
100
1,000 – 19,999
SF Available
20,000 – 49,999
SF Available
50,000 – 99,999
SF Available
100,000 – 199,999
SF Available
200,000+
SF Available
# of Buildings
3.5 MM
2.4 MM
1.7 MM
1.7 MM
0.7 MM1,000 – 19,999 SF Available
20,000 – 49,999 SF Available
50,000 – 99,999 SF Available
100,000 – 199,999 SF Available
200,000+ SF Available
Available Space Profi leTransaction Activity
Dessert and beverage manufacturer Jel Sert purchased the
304,482 SF building at 2380 Diehl Rd. in Aurora from Teachers
Retirement System of Illinois this July for $10.5 million. At
the time of the sale, the building was half occupied by SYX
Distribution. Jel Sert will assume occupancy of the entire building
when SYX Distribution’s lease expires in February, expanding
their warehousing capabilities in the area. The company is
headquartered in nearby West Chicago.
One of the largest land sales of the year, U.S. Foodservice, the
biggest privately held company based in the Chicago area,
purchased a nearly 50-acre parcel of land in Aurora this July.
The large land site could accommodate a warehouse building up
to 1 million SF.
Supply chain management service provider Midwest Warehouse
signed a short-term lease renewal and expansion to expand into
the full 549,588 SF building located at 2805 Duke Pky. in Aurora
during the third quarter. The company currently occupies about
350,000 of the facility.
Looking Forward
Conditions will continue to improve in the I-88 Corridor as
companies look to take advantage of the current market through
new leases and signifi cant expansions. One of the largest news
stories of the quarter, truck and truck engine manufacturer
Navistar has agreed to move their corporate headquarters to the
former Alcatel-Lucent East campus in Lisle.
Signifi cant I-88 Corridor Sale Transactions 3rd Qtr. 2010
Property Address City Size (SF) Sale Price Price PSF Buyer Seller
2380 Diehl Rd. Aurora 304,482 $10,500,000 $35.00 Jel Sert Teachers Retirement System of Illinois
Duke Pky. Aurora 49.8 acres $8,243,500 $3.80 U.S. Foodservice, Inc. Duke Realty Corporation
2100 Ogden Ave. Lisle 101,876 $4,365,000 $43.00 ROC Companies Wrightwood Capital
2225 White Oak Cir. Aurora 32,000 $900,000 $28.00 Chicago Title Land Trust Supermax, Inc.
I-88 Co
rrido
r Overview
Signifi cant I-88 Corridor Lease Transactions 3rd Qtr. 2010
Property Address City Leased (SF) Tenant Comments
2805 Duke Pky. Aurora 549,588 Midwest Warehouse Lease renewal
901 Bilter Rd. Aurora 195,000 Kohler New lease
3920 Enterprise Ct. Aurora 175,000 Cano Container New lease
940 N Enterprise St. Aurora 88,436 Demand One New lease
5400-5408 Janes Ave. Downers Grove 44,372 Undisclosed New lease
Italics denotes NAI Hiffman transaction
171
59
59
53
30 55
355
294
88
Plainfield
Woodridge
Naperville
aHinsdale
Romeoville
Bolingbrook
Burr Ridge
WiSpr
DownersGrove
I-55 Corridor
Submarket Trends
VacancyRate
NetAbsorption
AskingRents
9%5%
5%
10%
34%
37%
Bolingbrook
Plainfield
Lemont
Woodridge
Romeoville
Burr Ridge, Forest View,Willowbrook
Inventory By City
POPULATION 239,267 (est.)
2000–2009 POPULATION CHANGE +34.8% (est.)
# INDUSTRIAL BUILDINGS 655
MARKET SIZE (SF) 80,357,318
VACANCY 10,486,603 SF (13.0%)
3Q10 NET ABSORPTION 714,448
YTD NET ABSORPTION 410,470
NEW SUPPLY (SF) 0
UNDER CONSTRUCTION (SF) 53,000
Of all of the Chicago area industrial submarkets, the I-55 Corridor has
seen the most activity and development interest over the past several
years. As a result, the majority of the available land parcels are either
already developed or are controlled by developers, rendering the
I-55 Corridor an “infi ll market” with little additional land available for
signifi cant new development.
Vacancy and Absorption
The vacancy rate dropped nearly 1% during the third quarter from
13.9% at the end of June to 13.0% by the opening days of the third
quarter. This decrease, the fi rst appreciable drop in nearly two years,
is due to signifi cant absorption of vacant space, totaling 714,448 SF
for the quarter. Sprawling vacant spaces were absorbed, such as the
506,777 SF building located at 821 Bluff Rd. in Romeoville, which had
sat vacant since 2008. The facility was purchased by user Midwest Air
Technologies, Inc. during the third quarter.
Construction
New construction in the submarket remains limited to expansions such
as 53,000 SF being added at 510 Woodcreek Drive in Bolingbrook.
“The vacancy rate dropped nearly 1% during the third quarter, the fi rst appreciable
decrease in nearly two years.”
I-55 Corridor Overview
-1,000,000
0
1,000,000
2,000,000
3,000,000
4,000,000
0%
4%
8%
12%
16%
20%
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
1Q09
2Q10
1Q10
2Q09
3Q09
Net Absorption (SF)Vacancy Rate (%)4Q
09
3Q10
Vacancy and Absorption
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
1Q09
2Q09
3Q09
4Q09
2Q10
3Q10
1Q10
Deliveries (SF)
Under Construction (SF)
Under Construction & Recent Deliveries
Pictured Above: 821 Bluff Rd. in Romeoville’s Bluff Point Business Park, purchased by fencing,
lawn care and hardware products company Midwest Air Technologies during the third quarter
31 NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT – THIRD QUARTER 2010
0
10
20
30
40
50
1,000 – 19,999
SF Available
20,000 – 49,999
SF Available
50,000 – 99,999
SF Available
100,000 – 199,999
SF Available
200,000+
SF Available
# of Buildings
8.6 MM2.7 MM
1.8 MM
1.0 MM0.5 MM
1,000 – 19,999 SF Available
20,000 – 49,999 SF Available
50,000 – 99,999 SF Available
100,000 – 199,999 SF Available
200,000+ SF Available
Available Space Profi leTransaction Activity
One of the largest sale transactions in the submarket in recent
history, Midwest Air Technologies, Inc. purchased the vacant
506,777 SF distribution building located at 821 Bluff Rd. in
Romeoville’s Bluff Point Business Park. This fall, the company
will take occupancy of the building which was completed last
year and plans to use the space for distribution of fencing,
hardware and lawn and garden products.
A specialized freezer/cold storage building was purchased by
food distributor Supreme Lobster & Seafood Co. this September.
The building sold for $106.00 PSF, a comparatively high amount
due to the specialized nature of the facility. Supreme Lobster
plans to soon take occupancy of the 101,088 SF building.
The largest leases of the quarter involved ATI Fabricated
Components leasing 138,741 SF at 340 W. Crossroads Pky. and
warehousing company Dedicated Logistics leasing 106,733 SF at
1450 Remington Rd. in Bolingbrook’s Carlow Corporate Center.
Looking Forward
Demand should continue to pick up as companies look to
take advantage of the competitive rental rates and generous
concession packages being offered by area institutional landlords.
Due to the comparatively large size of the average transaction
in the I-55 Corridor, signifi cant absorption will be realized more
quickly than other submarkets where spaces tend to be smaller
in size and less desirable in amenities. The I-55 Corridor will
likely be one of the leaders in the recovery of Chicago’s Industrial
Market in the years to come.
Property Address City Leased (SF) Tenant Comments
340 W. Crossroads Pky. Bolingbrook 138,741 ATI Fabricated Components New lease
1450 Remington Rd. Bolingbrook 106,733 Dedicated Logistics, Inc. Lease renewal
1215 101st St. Lemont 100,800 Consolidated Distribution New lease
500 Territorial Dr. Bolingbrook 77,751 D&D Manufacturing Lease renewal
14420 Van Dyke Rd. Plainfield 73,753 Logoplaste New lease
400 Crossroads Pky. Bolingbrook 64,101 IFCO Systems Lease expansion
Signifi cant I-55 Corridor Sale Transactions 3rd Qtr. 2010
Property Address City Size (SF) Sale Price Price PSF Buyer Seller
821 Bluff Rd. Romeoville 506,777 $15,264,123 $30.00 Midwest Air Technologies, Inc. Land and Lake Development
279 Marquette Dr. Bolingbrook 101,088 $10,750,000 $106.00 Supreme Lobster & Seafood Co. M&E Cold Storage
175 E. Crossroads Pky. Bolingbrook 102,936 $7,895,000 $77.00 Steve Kersten IDI
I-55 Co
rrido
r Overview
Signifi cant I-55 Corridor Lease Transactions 3rd Qtr. 2010
Italics denotes NAI Hiffman transaction
nais
Gary/Chi
Chicago MidwayAirport
394
43 50
1
1
7
83
45
30
12 20
55
57
90
9480
80
294
355South
Holland Hammond
Schererville
Monee
WoodridgeBedford Park
Bridgeview
Park Forest
Tinley Park
le
Matteson SaukVillage
Mokena
BlueIsland
AlsipPalos
Heights
South Cook
Submarket Trends
VacancyRate
NetAbsorption
AskingRents
35%
5%8% 11%
14%
26%Bedford Park
South Holland
Bridgeview
Chicago Heights
Alsip
Other Southern CookCommunities
Inventory By City
POPULATION 675,579 (est.)
2000–2009 POPULATION CHANGE -5.2% (est.)
# INDUSTRIAL BUILDINGS 1,126
MARKET SIZE (SF) 85,528,194
VACANCY 10,197,898 SF (11.9%)
3Q10 NET ABSORPTION 619,352
YTD NET ABSORPTION 578,225
NEW SUPPLY (SF) 137,078
UNDER CONSTRUCTION (SF) 514,000
The South Cook submarket is one of the Chicago metropolitan area’s
largest in terms of geographic size and total square footage. The area
benefi ts from a good mix of manufacturing and distribution facilities
due to an abundance of skilled, educated labor, and excellent access
to several major expressways, train lines and public transportation.
The submarket consists of primarily older product with scattered
modern infi ll developments of around 2 million SF in Bedford Park
and additional projects in Alsip and Sauk Village. Ownership is mixed,
including institutional, owner/user and both national and local private
owners. While its location close to Chicago is key, Cook County taxes
can be a fi nancial burden.
Vacancy and Absorption
The South Cook vacancy rate dropped below 12% during the third
quarter for the fi rst time since the end of 2008. September ended
with a rate of 11.9%, down from 12.5% last quarter, a difference of
60 basis points. Vacancy had held between 12% and 13% for the
duration of the economic durntown, so this adjustment is an important
step towards recovery. This decrease is due to signifi cant absorption,
totaling 619,352 SF for the quarter.
“Vacancy dropped below 12% for the fi rst time since the end of 2008 due to signifi cant
absorption totaling 619,352 SF.”
South Cook Overview
-2,000,000
-1,400,000
-800,000
-200,000
400,000
1,000,000
0%
3%
6%
9%
12%
15%
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
1Q09
2Q09
3Q09
2Q10
1Q10
3Q10
Net Absorption (SF)Vacancy Rate (%)4Q
09
Vacancy and Absorption
0
300,000
600,000
900,000
1,200,000
1,500,000
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
1Q09
2Q09
3Q09
4Q09
2Q10
3Q10
1Q10
Deliveries (SF)
Under Construction (SF)
Under Construction & Recent Deliveries
Pictured Above: 6755 W. 65th St., Bedford Park, where M. Block & Sons leased
341,114 SF of vacant space, representing the largest lease in submarket this year
33 NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT – THIRD QUARTER 2010
0
20
40
60
80
100
120
1,000 – 19,999
SF Available
20,000 – 49,999
SF Available
50,000 – 99,999
SF Available
100,000 – 199,999
SF Available
200,000+
SF Available
# of Buildings
4.0 MM
2.8 MM
2.1 MM
1.8 MM
1.1 MM1,000 – 19,999 SF Available
20,000 – 49,999 SF Available
50,000 – 99,999 SF Available
100,000 – 199,999 SF Available
200,000+ SF Available
Available Space Profi leConstruction
The 135,708 SF 1970’s-era building located at 8687 S. 77th Ave.
in Bridgeview was recently rebuilt into a 137,078 SF facility and
was completed during the second quarter. Ongoing projects
include building expansions, such as the doubling of 16100
Lathrop Ave. in Harvey. The building is being expanded to
roughly 1 million SF in order to accommodate tenants Allied Tube
& Conduit Corp. and Tyco Electrical & Metal Products.
Transaction Activity
The largest sale of the third quarter involved private equity fi rm
KTR Capital Partners purchasing the 201,424 SF building located
at 6006 W. 73rd St. in Bedford Park for $7.4 million. The building
is fully leased to helicopter and plane engine parts manufacturer
Northstar Aerospace Inc.
In the largest lease transaction in the South Cook submarket
this year, end-to-end supply chain solutions provider M. Block
& Sons leased the 341,114 SF industrial facility located at 6755
W. 65th St. in Bedford Park. The warehouse building was built
in 2006.
Looking Forward
Vacancy rates should begin to fall as some of the more than
10 million SF of vacant space continues to be absorbed over
coming quarters if demand picks up and large transactions occur.
Until consecutive quarters of positive absorption are realized,
landlords will keep offering low lease rates and substantial
concession packages to attract tenants.
Property Address City Leased (SF) Tenant Comments
6755 W. 65th St. Bedford Park 341,114 M. Block & Sons New lease
11801 S. Central Ave. Alsip 284,356 California Cartage New lease
7557-7575 S. 78th Ave. Bridgeview 254,425 Oak Creek Distribution (HOBO) New lease
5139 W. 73rd St. Bedford Park 72,330 Undislosed New lease
South Cook Sale Transactions 3rd Qtr. 2010
Property Address City Size (SF) Sale Price Price PSF Buyer Seller
6006 W. 73rd St. Bedford Park 201,424 $7,400,000 $37.00 KTR Capital Partners American Realty Advisors
12500-12520 S. Lombard Ln. Alsip 86,200 $1,715,000 $20.00 Venture One Real Estate Freis Family Ventures
So
uth Co
ok O
verview
South Cook Lease Transactions 3rd Qtr. 2010
Italics denotes NAI Hiffman transaction
A
53
53
59
102
113
71
126
23
47
113170
30
30
34
6
5252
6
45
655 355
294
88 55
55
80
57
Aurora
Plainfield
Minooka
North Aurora
Tinley Park
New LenoxMokena
Kankakee
Bolingbrook
Joliet
Elwood
le Ottawa
Seneca
DownersGrove
Channahon
Shorewood
I-80/Joliet Corridor
Submarket Trends
NetAbsorption
AskingRents
Inventory By City
POPULATION 430,230 (est.)
2000–2009 POPULATION CHANGE +39.9% (est.)
# INDUSTRIAL BUILDINGS 614
MARKET SIZE (SF) 62,408,397
VACANCY 11,072,174 SF (17.7%)
3Q10 NET ABSORPTION -168,031
YTD NET ABSORPTION 249,307
NEW SUPPLY (SF) 0
UNDER CONSTRUCTION (SF) 217,712
The I-80/Joliet Corridor submarket has historically catered to multi-
state “big box” distribution. Its access to I-80 and I-55 position the
corridor well for distribution operations. In addition, the nation’s
largest inland port is located in 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. The
reason for its continued success is the development’s ability to offer
tremendous transportation savings to importing operations as well as
being a pre-approved Foreign Trade Zone. In addition, CenterPoint
Intermodal Center announced the much anticipated opening of a new
intermodal facility that began operations this quarter. CenterPoint
Intermodal Center now offers intermodal service with both the BNSF
and Union Pacifi c Railroads.
Vacancy and Absorption
The vacancy rate climbed slightly to 17.7%, up from 17.5% last
quarter, but down signifi cantly from 19.3% a year ago. Net absorption
totaled negative 168,031 SF for the quarter, the fi rst period of negative
net absorption seen in the submarket in the past three years. This
is deceiving, however, as the delivery of several million SF of new
“Vacancy and absorption will improve over coming quarters as tenants take occupancy
of recently lease space.”
I-80/Joliet Corridor Overview
-500,000
0
500,000
1,000,000
1,500,000
2,000,000
7%
10%
13%
16%
19%
22%
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
1Q09
2Q09
3Q09
Net Absorption (SF)Vacancy Rate (%)4Q
09
2Q10
3Q10
1Q10
Vacancy and Absorption
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
1Q09
2Q09
3Q09
4Q09
2Q10
3Q10
1Q10
Deliveries (SF)
Under Construction (SF)
Under Construction & Recent Deliveries
25%
5%
10%
16%
44%
Joliet
Mokena, New Lenox, Shorewood, Frankfort, etc.
Ottawa
Minooka
Elwood
VacancyRate
Pictured Above: An artist’s rendering of 21228 Frontage Rd. in Shorewood, where
logistics firm Jacobson Companies leased 507,187 SF during the third quarter
35 NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT – THIRD QUARTER 2010
0
20
40
60
80
100
1,000 – 19,999
SF Available
20,000 – 49,999
SF Available
50,000 – 99,999
SF Available
100,000 – 199,999
SF Available
200,000+
SF Available
# of Buildings
8.6 MM
1.7 MM
0.6 MM
0.9 MM0.8 MM
1,000 – 19,999 SF Available
20,000 – 49,999 SF Available
50,000 – 99,999 SF Available
100,000 – 199,999 SF Available
200,000+ SF Available
Available Space Profi leconstruction during 2008 offset the effects of new vacancies.
Without the completion of these new buildings, net absorption
would have been strongly negative during that period, as vacancy
had climbed from around 15% to over 20% in just over a year.
Construction
A 217,712 SF build-to-suit building is still under construction at
the new 800-acre intermodal facility in Joliet.
Transaction Activity
Following a very quiet second quarter for signifi cant transactions,
the third quarter featured several sale and lease deals well over
100,000 SF in size. High speed internet, television and voice
satellite solution manufacturer KVH Industries purchased the
100,415 SF building located at 8400-8412 W. 185th St. in Tinley
Park, where it had been the sole tenant and leased about 40%.
The building was taken into receivership in February.
The I-80/Joliet corridor’s largest leases of the year took place
during the third quarter and included logistics fi rm Jacobson
Companies servicing New Zealand dairy company Fonterra
leasing 507,187 SF at 21228 Frontage Rd. in Shorewood.
Looking Forward
Vacancy will decrease and net absorption will turn positive
again over coming quarters as tenants take occupancy of
recently leased space. Additionally, the submarket’s intermodal
developments play a key role in the future of the I-80/Joliet
Corridor. Increased interest in the cost-saving locational
advantages of these facilities will continue to drive demand.
I-80/Joliet C
orrid
or O
verview
I-80/Joliet Corridor Sale Transactions 3rd Qtr. 2010
Property Address City Size (SF) Sale Price Price PSF Buyer Seller
8400-8412 W. 185th St. Tinley Park 100,415 $4,262,358 $42.00 KVH Industries, Inc. Lincoln Financial Group
23315 S. Youngs Rd. Channahon 167,282 $3,050,000 $18.00 Siwin Corporation Smurfit-Stone Container
I-80/Joliet Corridor Lease Transactions 3rd Qtr. 2010
Property Address City Leased (SF) Tenant Comments
21228 Frontage Rd. Shorewood 507,187 Jacobson Companies New lease
1695-1701 Crossroads Dr. Joliet 266,680 Castle & Cooke Cold Storage Lease renewal
26416 Centerpoint Dr. Elwood 160,000 ITL New lease
23315 S. Youngs Rd. Channahon 158,850 Siwin Corporation New lease
4001 Olympic Blvd. Joliet 121,450 Smurfit-Stone Container New lease
4001 Rock Creek Rd. Joliet 100,060 Touchpoint Logistics New lease
Italics denotes NAI Hiffman transaction
I l l i n o i sW i s c o n s i n
Ind
ian
a
Illi
no
is
WaukeganRegional Airport
Ohare
WestoshaAirport
Chicago ExecutiveAirport
DupageAirport
Gary/Chicago Airp
Chicago MidwayAirport
171
43
22
53
1
176
1
72
38
38
21
120
21
59
176
72
64
120
25
64
50
25
60
83
83
31
31
43
59
53
60
31
47
22
83
23
53
173
173
25
59
53
47
23
53
64
176
76
83
38
173
47
71
23
75
394
20
30
12
41
30
12
34
52
6
52
45
20
30
41
45
30
30
52
14
30
30
45
6
12
14
41
51
51
355
90
55
90
94
94
9094
9480
80
80
55
55
57
57
88
294
294
294
290
290
35539
39
90
Aurora
Plainfield
Hazel Crest
Munster
Glencoe
Hammond
Elk Grove Village
Zion
Lake Zurich
Monee
Crystal Lake
MontgomeryWoodridge
Minooka
Batavia
Arlington Heights
South Elgin
Pleasant Prairie
Grayslake
Skokie
Northbrook
Park Ridge
Franklin Park
Naperville
Highland Park
North Aurora
BedfordPark
Hinsdale
Park Forest
Bensenville
East Chicago
Tinley Park
NilesSchaumburgDes Plaines
St Charles
New Lenox
Romeoville
Bloomingdale
West Chicago
Fox Lake
Dundee
MattesonMokena
Blue Island
Carol Stream
Bolingbrook
Lake Forest
Waukegan
Joliet
Oak Lawn
Sugar Grove
Elgin
Elmhurst
Burr Ridge
MelroseParkGeneva
McHenry
Vernon Hills
BuffaloGrove
Mundelein
MortonGrove
Wood Dale
Cicero
La Grange
Westchester
PalosHeights
Elwood
Rockford
Belvidere
CherryValley
Beloit
elle
La SalleOttawa
Seneca
DeKalb
Hampshire
Chicago
Evanston
WillowSprings
DownersGrove
Streamwood
1
2
3
4
5
6
8
9
10
19
12
13
14
15
16
5317
18
19
11
20
21
7
vansnstonv n
Chicago North1
Chicago South2
North Cook3
West Cook4
Southwest Cook5
South Cook6
I-57/Will Corridor7
Lake County8
Northwest Cook9
O’Hare10
Central DuPage11
I-55 Corridor12
McHenry County13
I-90 Northwest14
Fox Valley15
I-88 Corridor16
I-80/Joliet Corridor17
DeKalb County18
I-39 Corridor19
Southeast Wisconsin20
Northwest Indiana21
Industrial Submarket Map
© 2009 NAI Hiffman
37 NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT – THIRD QUARTER 2010
Sub
market M
ap / M
ethod
olo
gy / D
efi nitions
The information included in this report is the result of a compilation
and analysis of data from various sources on class A, class B and
class C offi ce and industrial properties located in the metropolitan
Chicago area defi ned by the submarket map on page 36. 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 all individuals,
companies and resources, whose contributions helped make this
report possible.
All of the information detailed throughout this report is saved and
organized in our own in-house database and is regularly updated.
By utilizing this database, we can analyze, calculate and report
demographic information, inventory, vacancy, availability, net
absorption, and transactional information.
Methodology &Defi nitions
Methodology
Defi nitionsThe NAI Hiffman Industrial Market Report tracks several measures
of market conditions. This information is collected for individual
properties then consolidated, organized and analyzed for
submarket and market totals. These terms, used throughout the
report, are defi ned below according to NAIOP Terms & Defi nitions.
Total Inventory (Market Size) The total square footage of gross
rentable area in a specifi c market. It includes the gross rentable
area in buildings that have received a certifi cate of occupancy.
Total inventory increases when a new building is delivered and
decreases when an existing building is destroyed, demolished or
its use changes.
Vacancy Rate A measurement expressed as a percentage of
the total amount of vacant space divided by the total amount of
inventory. Vacant space is inventory that is not currently occupied.
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 defi ned as total square footage and/or number
of buildings that has completed construction and
received a certifi cate 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
abandoned or discontinued) but for which a certifi cate
of occupancy has not yet been issued; or b) properties
undergoing conversion to offi ce from another use or
c) properties undergoing a major renovation where
75 percent or more of the building is not available for
lease and building generally requires a certifi cate of
occupancy to be made available for lease.
Available Space The total amount of space that is
currently being marketed as available for lease in a
given time period. It includes space that is available,
regardless of whether the space is vacant, occupied,
available for sublease, or available at a future date.
Available space excludes shadow space.
Shadow Space That portion of leased space which
is vacant but not available space. Shadow space is
diffi cult to measure. (Synonym: phantom space)
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NAI Hiffman is the largest full service, privately-owned commercial real estate brokerage and management company in the
Chicago region. With over 150 brokers and employees, NAI Hiffman is dedicated to providing our clients with the most
comprehensive real estate services. Our clients come to us for our deep local knowledge and they build their business on the
power of our global managed network.
NAI Hiffman delivers world-class, results-oriented, offi ce, industrial, retail, and investment brokerage and management services including:
Acquisition & Dispositions
Leasing & Subleasing
Tenant Representation
Property Management
Sale/Leaseback
Build-to-Suit
Investment Services
Site Selection
Due Diligence
Market Research
Consulting & Strategic Planning
Receivership & REO Disposition
39 NAI HIFFMAN METROPOLITAN CHICAGO INDUSTRIAL MARKET REPORT – THIRD QUARTER 2010
NAI Hiffman
Dennis Hiffman
Chairman & C.E.O.
630 691 0616
David Peterson, RPA
C.O.O.
630 691 0691
Industrial Services
John Cash, SIOR
Exec. V.P./Managing Director
630 691 0609
Duke Botthof
Executive Vice President
630 693 0641
Joe Bronson
Vice President
630 317 0725
Brian Colson
Executive Vice President
630 691 0619
Steve Connolly, SIOR
Executive Vice President
630 693 0642
Benjamin Cremer
Vice President
630 691 0614
Kelly Disser
Associate
630 317 0721
Eric Fischer
Senior Associate
630 693 0677
Jeff Fischer
Vice President
630 317 0726
Larry Goldwasser
Vice President
312 327 6848
David Haigh
Associate
630 693 0649
Daniel Leahy, SIOR
Executive Vice President
630 691 0604
Jay Maher, III
Associate
312 327 6846
Irvin Malik
Senior Associate
312 327 6837
Adam Marshall
Senior Associate
630 691 0603
Mark Moran
Executive Vice President
630 693 0656
Lawrence Much, SIOR
Executive Vice President
630 691 0606
Michael Robbins
Associate
630 693 0680
Adam Roth, CCIM, SIOR
Vice President
630 691 0607
Stephen Sullivan
Vice President
847 610 0123
Eric Tresslar
Executive Vice President
630 693 0650
John Whitehead
Associate
630 693 0643
Daniel Wilkins
Associate
630 693 0653
Investment Services
Arthur Burrows
Senior Vice President
630 693 0675
Mike Tenteris
Senior Vice President
312 327 6823
William Montana
Senior V.P./Managing Director
630 317 0715
Research
Craig Hurvitz
Director of Statistics and
Market Information
630 693 0645
Marketing
Julia Sutherland
Marketing Director
630 317 0701
Jennifer Burke
Catherine DeBoer
Elsa Gaztambide
Karen Kirian
Alison O’Connell
Melody Palese
Denise Racana
NA
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NAI HiffmanCommitted to Chicago.
Connected to the World.™
Build on the power of our network.
www.hiffman.com
Corporate Offi ceOne Oakbrook Terrace Suite 600Oakbrook Terrace IL 60181tel 630 932 1234fax 630 932 7258