Lake Zurich industrial vacancies drop 12 percent, sign of improving economy
A new report by the Lake Zurich building and zoning department says industrial unit vacancies have dropped more than 12 percent from last year, raising optimism about the village's economic health.
At the end of March, 58 of Lake Zurich's 291 industrial units were vacant, compared to 66 at the same time last year. The village's industrial vacancy rate, based on total occupied space, fell from roughly 22 percent to 18 percent.
Officials credited the gains to a gradually improving economy and a more active relationship between the village and business owners.
“We try to communicate with business owners to see what is or isn't working to make Lake Zurich more attractive to proprietors,” said Dan Peterson, building and zoning director. “We got some encouraging results with this report.”
The industrial park has welcomed eight new businesses since March 2011, mostly from the construction and technology industries. In addition, total industrial unit square footage grew just under 2 percent, while vacant space shrank nearly 17 percent from the first quarter of 2011.
The average rental rate increased 16 cents to $6.46 per square foot. Those low prices have attracted attention from nonindustrial business owners, which has prompted discussion in Lake Zurich about amending ordinances that prohibit such enterprises from leasing space in the industrial park.
Despite the improvements, Lake Zurich's 18 percent industrial vacancy rate still is 3 percentage points higher than the national average and more than 7 percentage points above the Chicago-area average. However, the national and local vacancy figures have increased slightly for two straight quarters, according to Collier's International.
“It's good to see our numbers trend down when a lot of other areas are trending up,” Peterson said. “We're optimistic.”
The nationwide economic recession hit Lake Zurich's leasing market particularly hard, as in 2010 when the industrial vacancy rate topped 30 percent. The recent trend has been markedly positive; it's the third consecutive year Lake Zurich's rates have dropped.
The industrial market report follows the village's retail report from April that saw similar improvements in the retail vacancy rate, which fell more than 15 percent from 2011.
“It shows we've got a good, diverse economy in Lake Zurich. We've got to continue working to hopefully keep moving these numbers in the right direction,” Peterson said.