Economic uncertainty shapes industrial business decisions
December 3, 2025 — As the industrial sector moves into 2026, some Chicago businesses are shifting their leasing strategies due to economic uncertainty and the impact of tariff and other trade policies. While Chicago remains a top national industrial market with solid tenant demand, some companies are delaying longer-term space expansion and pursuing shorter leases or lease renewals in light of rising costs and slowing economic activity.
According to a market review by Brown Commercial Group, leasing velocity has slowed in some Chicago submarkets among tenants looking for less than 100,000 square feet of space. While many companies want to expand their businesses, they are reluctant to take on a larger or longer-term lease given economic uncertainty.
“In the last six months we’ve seen a slowdown in leasing activity due to the uncertainty and other fallouts from tariffs,” said Broker Pat Crowley of Brown Commercial Group. “We’re seeing more renewals and short-term leasing transactions as companies look for solutions to support their businesses in the near term.”
O’Hare Leasing Activity
In the O’Hare submarket, leasing activity has been gradually slowing since its peak in 2021, when volume reached approximately 9.7 million square feet, according to CoStar research. Over the past 12 months, the market recorded a total of 5.3 million square feet of industrial leases, with an average size of about 13,000 square feet and an average lease term of approximately 36 months.
The addition of tariffs has been particularly problematic for manufacturers, e-commerce companies and other industrial businesses that rely on foreign products, materials and trade. “There is still a lot of uncertainty around where the tariff numbers will settle and it’s caused everyone to reevaluate how they are approaching their business decisions,” said Crowley. “We’ve seen a lot of companies looking to other companies to import from, but that’s not an easy process and it typically will cost more.”
See the Illinois Real Estate Journal for more.
