buildings from 100,000 to 200,000 square
feet that can be divided for tenants into
50,000 to 75,000 square feet.
“Every economic development person will
tell you there are not smaller, free-stand-
ing buildings available,” Khoury maintains.
“In 2016, development will continue in the
big box space, absorption will hurt if we
don’t also build smaller.”
Hoffman attributes this salubrious situa-
tion to what had been a lack of development
and finally some spec development
“We have about 2 million square feet of
spec space that is going to be delivered
from the first of the year until Memorial
Day, which for our market is a significant
amount,” says Hoffman. “After that 2 mil-
lion square feet, there is another 2 million
square feet being contemplated as proj-
ects in the next year.”
The premier industrial corridor is called
I- 94 West, which starts two miles outside
of downtown and goes about 15 miles
west. Then there is the I- 41 corridor that
runs about eight miles to the north. That
encompasses about 160 million square
feet with very high barriers to entry, says
Hoffman, “so we have seen a trend toward
in-fill industrial development, where
developers are coming in and buying old
properties, tearing down and putting up
new buildings. That has been very suc-
cessful in our marketplace. We think that
will keep occurring.”
The largest spec building going up is
600,000 square feet in the Kenosha Market,
says Hoffman. “Last year, Centerpoint con-
structed buildings of 500,000 square feet
and 400,000 square feet. They preleased
the 500,000 and presold the 400,000 to a
packaging company and a food distributor.“
Hoffman ruminates, “the last time 2 mil-
lion square feet was delivered, it would
pre-date my time here, which was in 2000.
I don’t know if it ever happened before.”
Primary Markets
South of Milwaukee, also on Lake Michigan,
sits the country’s second largest industrial market, Chicago, with about 1. 3 billion
square feet of space.
It’s getting even larger, says Liebman,
“with all the spec development that has
gotten done in the last couple of years as
well as the build-to-suits. Saddle River
Logistics is building 1. 1 million square feet.
That was announced a couple of months
ago. There are probably at least one or
two other 800,000 square foot to 1 million+
square-foot, build-to-suits that have been
announced in the last 6 to 8 months.”
Two of the city’s larger, traditional submarkets are I-80/I- 55 corridors which
are southwest of Chicago and running
for almost 40 miles, and Chicago O’Hare
Airport, on the western edge of the city
proper. These are huge submarkets. The
O’Hare area alone totals about 141 million
“In 2016, development will
continue in the big box
space; absorption will
hurt if we don’t also build
smaller.”
...we have seen a trend toward in-fill industrial
development, where developers are coming in
and buying old properties, and tearing down and
putting up new buildings. That has been very
successful in our marketplace.
“
”
Industrial brokers in another older
Midwest City, this one on Lake Michigan,
are also enjoying some great times again.
Milwaukee’s industrial market totals 270
million square feet with a 4. 9 percent
vacancy rate. “This market is strong,”
says Jeff Hoffman, SIOR, CCIM, a principal
with Cushman & Wakefield/The Boerke
Company in Milwaukee Wis. “In our
Cushman & Wakefield network of similar
markets, from a volume standpoint, we
are the second best performing industrial
market from a vacancy standpoint.”
