Chicago Industrial Properties February 2017 : Page 1

FEBRUAR Y 2017 ® VOL.27 NO.25 THE LEADING NEWS SOURCE FOR INDUSTRIAL REAL ESTATE PROFESSIONALS & USERS DIRECTORIES (pg.16): Construction Companies, Contractors/Subcontractors, Finance Industrial leaders: Expect a big year for distribution, warehouse facilities in 2017 Southeast Wisconsin industrial market not just attracting tenants from Illinois T By Dan Rafter, Editor he story is an old one: Illinois end users are fleeing the state and crossing the border into Southeast Wisconsin to find more affordable warehouse and distribution center space. But a pair of brokers – one from Chicago and one from Milwaukee – dispute this narrative. John Sharpe, principal with the Chicago office of Lee & Associates, and Terry McMahon, principal with the Milwaukee office of The Boerke Company, both say that the Southeast Wisconsin industrial market is still a strong lure for Illinois industrial users. But the region is also attracting a growing number of com -panies from its own state, too, end users that are targeting communities such as Racine and Kenosha, Wisconsin, for their expansion plans. The two brokers are also working together to market the Enterprise Business Park in Stur -tevant, Wisconsin. This park, owned by real investment company Ashley Capital, is already home to a 376,000-square-foot Class-A in -dustrial building that was built in 2015. Three more industrial facilities are now planned for the business park. Chicago Industrial Properties recently spoke with Sharpe and McMahon about the strength of this industrial market and the diversified base of tenants locating in this region. Chicago Industrial Properties: We hear a lot about how industrial users in Illinois are increasingly crossing the border to Southeast Wisconsin. Is that still a strong trend? Terry McMahon: I’ve seen a change in the Southeast Wisconsin market. In the past, ev-eryone said that it was companies coming over the border from Illinois that made that market so strong. But the growth we are seeing in our properties in Southeast Wisconsin today By Declan Harty, Staff Writer Thanks largely to a continued surge in e-commerce activity, the boom in industrial property has cued industrial professionals to gear up for what could be a year filled with new problems, trends and a constant need for more supply. From e-commerce’s boom to a new presidential administration, the industrial real estate market is gearing up for changes that could make ripples for years to come. T he growth of the industrial market – in Chicago and across the country --isn’t ex-pected to slow at all in 2017. The Chicago industrial market alone saw record net ab-sorption of 26.6 million square feet in 2016, according to a fourth quarter market report from Colliers Interna-tional. The report detailed that the Second City saw its industrial vacancy rate drop 62 basis points in 2016, falling to 6.7 percent, the lowest vacancy rate since the third quarter of 2001. -With 85 construction projects completed in 2016 and another 58 currently under construction, the Chicago INDUSTRIAL (continued on page 10) PRSRT STD U.S. Postage TWIN CITIES, MN PERMIT NO. 31515 PAID Wisonsin (continued on page 5)

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