Elgin's Vacancy Rate Overview

     Industrial vacancy rates were at an all-time low of 2.11% in the third quarter of 2019. With millions of square feet of new construction added in the last few years and a few large buildings that have recently come on the market the rate has stabilized at 6.08% today. This is still below the 10-year average vacancy of 7.04%. Elgin had a net 12-month absorption of only 113,000 square feet in the past twelve months. Net absorption is the sum of square feet that became physically occupied, minus the sum of square feet that became physically vacant. Several recently finished buildings may all be occupied in the coming months and should bring the rate back down.

     Multi-Family vacancy rate has climbed from 1.8% in Q3 of 2022 to 5.4% today but is estimated to drop back down. The average rent price went up from $1,277 in April 2023 to $1,488 today and rising. A 3-bedroom apartment for example averaged $1,558 per month in April 2023 and is now at $1,847 per month. By the end of the Q4 2030, rents for a 3-bedroom unit are estimated to climb to $2,015 in Elgin. Rent prices, regardless of the number of bedrooms, are forecasted to rise over the next five years. Demand exceeds supply as the City of Elgin continues to grow.

     Office vacancy rates have gone from a low of 17.3% at the end of the fourth quarter of 2015 to 20.5% today. This is based on approximately 4.7 million square feet of inventory in Elgin. There has been a negative net absorption of minus 47,500 square feet in the past 12 months. The 10-year average vacancy rate for Elgin office property is 20.25%, and the office market is not showing improvement. There is 970,000 square feet of available office space in Elgin and supply exceeds demand.

     Retail vacancy rates went down and are near all-time historic lows in Elgin. The current retail vacancy rate is at 3.9% today. There is 224,000 square feet of unoccupied space out of a total of 5.6 million square feet available for lease or purchase. That is approximately the size of two Walmart stores in all of Elgin. Market rent prices are at an all-time high of $18.68 per square foot. Sale prices for retail property are also near record all-time highs of $166 per square foot. The vacancy rate is projected to remain under 4.0% through 2030. Demand is higher than the supply.

     The Overall vacancy rate for 11 distinct types of commercial real estate property segments in Elgin decreased from 7.8% in October to 7.3% today. The overall 10-year average is 8.18%. Market rent per square foot is at an all-time high of $12.74. In the last 12 months, 110,000 square feet of commercial space was absorbed. The existing inventory is 40 million square feet of commercial space in Elgin. Demand is projected to outweigh supply over the next 5 years.

      If you have any questions, please give Tony Lucenko a call at 847-741-5663.