Lake County industrial activity: Steady demand fuels growth

Feb. 24, 2026 — Lake County industrial activity is showing positive signs of growth, with steady demand supported by positive tenant absorption and low vacancy rates. Ongoing uncertainty over tariffs and their impact on costs and business planning are creating challenges for tenants, however.

According to a Brown Commercial Group market review, the vacancy rate declined to 4.9% as tenant demand fueled leasing activity. This represents a nearly 3% drop in the vacancy rate. Lake County’s absorption rate climbed to 1.3 million square feet, up from 640,000 square feet in the previous year. Limited construction is a concern, however. The submarket added just 44,000 square feet of new industrial space in the past year but there are no new projects in the pipeline, according to CoStar research.

“Tariffs are a significant issue facing industrial tenants as they make decisions on whether to renew, expand or downsize,” said Brown Commercial Group Broker Collin Tyrrell. “Even manufacturing companies that are based in the United States have exposure to tariffs through materials or parts they import, adding extra layers to their operational challenges.”

The outlook for North Lake County activity remains positive for 2026, yet demand is expected to slow in the coming quarters. This could lead to a slight increase in vacancy, but the absence of new construction in the pipeline is expected to moderate any increases.

A shortage of smaller spaces is also impacting many industrial users’ growth plans. “We are seeing a lot of interest in Lake County industrial space, but the options are limited for companies looking for less than 50,000 square feet,” said Tyrrell.

See this Illinois Real Estate Journal story for more.