Overall Growth Stalls; Although West Loop, River North and Class C Space Tightens Up
Economic improvement in Chicago’s CBD office market continued slowly at the close of 2013. Uncertainty regarding interest rates and the effects of the Affordable Care Act continued to hamper momentum. Subject to these conditions, the Chicago CBD also improved slowly. Overall availability reached 16.4%, almost on par with last year’s 16.5%, and overall vacancy decreased to 12.5%, down slightly from 12.7% in 2012. Quarterly net absorption totaled -245,211 SF versus last year’s 298,126 SF, while yearly net absorption reached -17,920 SF compared to 794,398 SF in 2012. Although the business environment is improving overall, the trend to downsize square footage per employee and its effect on overall office size is a factor driving in negative net absorption for the year.