Top factors impacting industrial leasing
December 16, 2025 — The industrial leasing out look is currently shaped by shifting tenant needs and new supply being added in the market. These dynamics are adding opportunities as well as challenges for companies, notes Pat Crowley, a broker with Brown Commercial Group. “In the last several years, the market for smaller industrial space has grown from a more limited number of options to up to 15 viable buildings at a time. Tenants now have more opportunities and we are seeing more rental concessions and flexibility on lease terms.”
Among the top factors impacting leasing decisions today are:
- Tariffs and their impact on business revenue, market stability and confidence
- Interest rates, which have dropped slightly, but are still putting an additional strain on business financing and property sales. Many investors are still waiting on the sidelines for additional rate decreases.
- Consumer spending and its impact on retail and e-commerce businesses.
A look at the overall Chicago industrial market shows that leasing velocity remains steady in spaces larger than 100,00 square feet. According to Colliers research, 135 new industrial leases were signed during Q3 2025, which reflected a nearly 15 percent increase in new leasing volume on an annual basis. The annual growth was particularly strong in the 100,000 to 200,000 square foot range, which recorded a 65 percent increase, from 28 leases a year ago to 43 in 2025.
As of the fourth quarter of 2025, Chicago recorded 125 million square feet of available industrial space, bringing the availability rate to 8.7%, according to CoStar research. About 75 percent of that space is concentrated in the logistics segment.
