What’s ahead for O’Hare industrial demand?
June 14, 2025 — The O’Hare industrial demand scenario at mid-year is showing shifts and turns, but there is plenty of optimism for the second half of 2025. A market report by Brown Commercial details how a low vacancy rate and other strong fundamentals are keeping the market in balance. According to CoStar research, the O’Hare industrial market is continuing its reign as a major national logistics hub. The submarket is posting a 4.6% vacancy rate at mid-year, well below its all-time average of 7%. With little land to build on, the submarket is more protected from oversupply concerns than other U.S. industrial markets.
O’Hare industrial demand is also shaped by changes in space needs in the area. As the demand for data centers has grown exponentially, the O’Hare market has become a draw for national developers tapping into this hot market segment. The market is welcoming new tenants and owners, especially within the data center cohort. Examples include Prime Data Center’s three building campus totaling approximately 1 million square feet in Elk Grove Village, IL. And, the market continues to dominate the region in traditional industrial freight traffic, given its proximity to O’Hare International Airport and its ranking as one of the busiest airports in North America for cargo traffic.
Demand for small to mid-sized O’Hare industrial space continued to increase throughout the Chicago market, following a similar pattern experienced in Q4 2024, according to Q1 2025 research from Colliers. Leases for spaces under 80,000 square feet saw a 5.7 percent increase, totaling 2.7 million square feet across 94 deals, compared to 89 leases amounting to 2.6 million square feet signed in the fourth quarter of 2024.
