Vacant Warehouse Space Decreasing In Chicago Area
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ROMEOVILLE, Ill. (CBS) – When it comes to the economy turning a corner, there are small signs of hope.
The latest numbers show that Illinois’ jobless rate fell to 8.6 percent last month. It comes as the state added some 46 thousand jobs over the last year.
CBS 2’s Vince Gerasole reports signs of the change can also be found in the area’s vacant industrial space, which is beginning to fill up.
S&S Activewear has a massive warehouse in Romeoville, where the company stores about 25 million garments and employs 250 workers. Business has been good enough that they’ve added 32 new positions since last fall.
“Until late last summer and early fall I would not have thought that possible,” S&S Activewear’s Jeff Adams said.
Once uncertain about maintaining all the space at their Romeoville warehouse, increased demand for their products convinced owners to sign a new extended lease.
It “gave us the confidence to make long term strategic plans that have some risk involved,” Adams said.
Although tens of millions of square feet of warehouse space still sits empty in the Chicago area, vacancy rates have slowly declined since last year.
“What we’ve seen is an increase both in the use demand for warehouse as well as manufacturing buildings,” Britt Casey, an analyst with Cushman & Wakefield, said.
Casey said that, in 2009, the vacancy rate was 11.4 percent. Last year, it dropped to 11 percent. That’s 4.4 million square feet of now-active industrial space and companies taking advantage of lower rents too.
Three years ago, warehouse space the S&S facility in Romeoville was renting for roughly $3 per square foot. That price has since decreased to $2.75 per square foot.
Still, it’s holding steady and, if trends continue, could rise by midyear.
“It’s a positive sign,” Adams said. “Taking that kind of financial risk bodes well for what we perceive the economy doing for several years.”
There is a dark cloud to this silver lining: the increased state corporate income tax. Analysts worry it could send companies that don’t need to be in directly in Illinois to move to neighboring states like Wisconsin or Indiana.