July 9, 2018 Comments Off on Tenants for Freezer Space May Be Out in the Cold Views: 908 Chicago News, Top Chicago

Tenants for Freezer Space May Be Out in the Cold

NKF’s Geoffrey Kasselman will be among the experts taking the stage at Connect Industrial, coming up on July 11 in Chicago. Here’s a link for more information about the conference and to register.

New deliveries of speculative industrial product that hasn’t gotten any tenants helped push the Chicago area’s vacancy rate slightly upward to 8.1% in the second quarter, NKF reported. A single spec project, the Rock Creek Logistics Center in Joliet IL (pictured), accounted for more than half of the two million square feet of spec space that delivered vacant in Q2.

Notwithstanding the region’s well-filled pipeline, NKF cited a shortage of cold storage facilities, mainly because of construction costs up to four times higher than those for general industrial space. Freezer/cooler space costs $150 or more per square foot to build, compared to $40 to $50 per square foot for conventional product.

The cost factor makes developers wary of being stuck with “a very expensive property if it doesn’t lease right away” even with strong demand regionally, according to NKF. Accordingly, tenants for such space may face “a lengthy search.”

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