In a bit of good news for the Chicago industrial sector, the amount of new construction of warehouse and manufacturing space rose during the second quarter, according to the latest research from Colliers.

According to Colliers’ second-quarter Chicago industrial report, construction was ongoing for 43 buildings as of the end of June, totaling 13.6 million square feet.

That might not sound like a lot when compared to this sector’s recent boom times. But it does represent the first increase to the Chicago-area construction pipeline since the second quarter of 2023.

Colliers said that construction starts totaled 4 million square feet across 11 projects, nearly doubling the 2.1 million square feet of industrial construction observed in the market during the first quarter of the year. As in most markets, the majority of new industrial construction in the Chicago market was build-to-suit, with eight of these projects falling in that category.

There was a notable increase in build-to-suit projects under construction, reaching 8.6 million square feet by the end of the second quarter, a 29% rise from the firsdt quarter and the highest level of build-to-suit activity since the third quarter of 2022.

Speculative construction is down, though, as it is in most markets. Colliers reported that speculative construction in the Chicago industrial market totaled only 5 million square feet at the end of June, marking its lowest level since the first quarter of 2018.

New construction deliveries were limited in the second quarter, with 10 new industrial buildings totaling 2.9 million square feet completed. Speculative completions amounted to only 1.1 million square feet, according to Colliers’ report, marking the lowest spec figure recorded since the second quarter of 2021.

The limited delivery of speculative space, coupled with increased tenant demand, contributed to the Chicago industrial vacancy rate falling to 4.84%. This is a dip of 45 basis points from the first quarter’s rate of 5.29%.