🚨 Singapore’s Mapletree acquired ~29 acres in Joliet, IL to develop a 418,880-SF warehouse along the I-80/I-55 corridor, its second Chicago-area site in recent months, signaling persistent cross-border appetite for U.S. logistics. Concurrently, U.S. industrial completions fell to 71.5 MSF in Q2 2025 (-44.6% YoY) and the under-construction pipeline has contracted, setting up tighter 2026 deliveries.
With Q2 Chicago leasing at 10.7 MSF (multi-year high), quality big-box demand remains intact, improving pre-lease odds and term-sheet leverage for well-located product. Net: foreign equity plus a shrinking supply pipeline supports execution for Midwestern Class-A development, even with normalized vacancy.
Planned facility size (Joliet): 418,880 SF, site c. 29 acres (announcement, Sept 11–12, 2025).
U.S. industrial completions: 71.5 MSF in Q2 2025 (-44.6% YoY).
U.S. net absorption: 29.6 MSF in Q2 2025 (roughly flat QoQ).
Chicago new leasing: 10.7 MSF in Q2 2025 (highest since 2022).
Loan Performance. Fewer 2026 deliveries increase the probability of earlier stabilization and firmer rents, aiding DSCR on construction-to-perm executions. For weaker submarkets, carry relief still hinges on pre-lease depth and TI burn-rate discipline rather than rate moves alone.
Demand Dynamics. Chicago’s big-box absorption and elevated leasing reflect resilient 3PL/retail/manufacturing flows into rail/highway nodes. Limited speculative starts improve landlord leverage on free-rent and step-ups for modern specs (clear heights/dock packages).
Asset Strategies. Sequence TI/LC to prioritize quicker-to-occupy bays; stage capex in tranches tied to executed LOIs. Re-stripe OPEX (yard management, trailer parking) to justify rent premiums and reduce downtime between tours.
Capital Markets. Life-co/bank construction quotes remain available for core industrial at mid-50s to mid-60s LTV; spread stacks are sensitive but benefit from foreign-equity partnerships that reduce leverage. CMBS/CLO tone is improving off mid-year wides, but borrower pass-through remains deal-specific.
Supply is decelerating while demand normalizes—bullish for 2026 lease-up velocity.
Class-A big-box near intermodal corridors remains favored over smaller, older stock.
Pair construction debt with pre-lease anchors or foreign-equity JV to tighten pricing.
Watch mezz/preferred structures; spread volatility can still reprice coupons late in process.
🛠 Operator’s Lens
Refi. For stabilized 2024–2025 deliveries, preserve prepay flexibility; size caps through maturity to guard against spread drift.
Value-Add. Tie larger capex to executed leases; hold 7–10% contingency for dock/yard upgrades that move rent.
Development. Underwrite conservative lease-up and modest rent growth; bid long-lead items early to lock schedule.
Lender POV. Banks/life-cos prefer modern specs with strong sponsor and logistics nodes; CMBS more selective but receptive to well-leased big-box with resilient tenancy.
Pre-leasing confirmation: Track LOIs on 300–500k-SF Joliet/I-80 corridor specs over the next 1–2 quarters.
Capital markets: Monitor weekly CMBS conduit BBB– spreads for pass-through to construction-to-perm takeouts.
Pipeline test: Watch Q3–Q4 2025 starts; continued pullback strengthens 2026 pricing power.
September 15, 2025 (America/Chicago). CoStar; Cushman & Wakefield; Colliers; Trepp.
U.S. Industrial Completions Are Rolling Over
