On this episode of Ten with Ben, Justin Kessler, Nathan Meissner, and Lauryn Sussman join Ben to reflect on a productive 2024 for the tenant rep team at Bradford Allen. The team discusses the uptick in tenant activity, surprising stability in office space needs, and the late-year momentum in deal-making. They also highlight how flexibility from ownership groups has created opportunities for tenants despite market challenges.
Looking ahead to 2025, the team shares their optimism for continued market growth and new opportunities as the market adapts.
Prefer the audio? Listen to the MP3 or stream from your favorite podcast provider.
Bradford Allen is pleased to share with you our latest office market report.
It was a familiar story in Q3 for Chicago’s downtown office market as headline statistics didn’t improve, nor degrade, materially over the prior quarter.
Absorption was negative 600,000 square feet, bringing the year-to-date absorption to negative 2.6 million square feet.
The direct vacancy rate in the CBD reached 22.5%.
The CBD’s average gross asking rate dropped slightly to $42.85 per square foot.
Well-capitalized owners continued to withstand market fluctuations, attracting and retaining a strong tenant base.
Bradford Allen is pleased to share with you our latest office market report.
This quarter in the downtown office market:
Absorption improved but remained negative with -67,000 square feet absorbed through Q2/24, resulting in a total of -1.9 million square feet through the first half of 2024.
The direct vacancy rate reached 22% in Chicago’s CBD.
Demand for move-in-ready suites has increased significantly over the past several years.
The average gross asking rate for the CBD held steady at $43 per square foot.
New York, NY – Bradford Allen, a national full-service real estate firm, today announced the execution of a new lease on behalf of P.J. Clarke’s at 434 W. 33rd Street for 7,500 square feet. The historic local eatery will occupy 7,500 square feet at Manhattan West, a vibrant, six-acre mixed-use development of Brookfield Properties. Glenn Isaacson, executive vice president at Bradford Allen’s New York office, represented the tenant.
“We’re proud to have played a pivotal role in facilitating P.J. Clarke’s expansion into Manhattan West. By representing the tenant in this transaction, we not only contributed to their strategic growth but also enhanced the community by bringing one of the city’s iconic local brands to the West Side,” said Isaacson.
P.J. Clarke’s original location at Third Avenue and 55th Street is a New York staple with a legacy dating back to 1884. The new location will mark the eatery’s fourth—and largest—in Manhattan, joining a growing enterprise that now Philadelphia and Washington D.C.
About Bradford Allen
Bradford Allen (BA) is a commercial real estate firm based in the heart of downtown Chicago. Founded in 2003 by principals Jeffrey Bernstein and Laurence Elbaum as an office brokerage, the firm has grown into a vertically integrated commercial real estate company, offering a full array of services and expertise across multiple U.S. markets to entrepreneurial, corporate and not-for-profit clients, including strategy, marketing and transaction execution for occupiers, investors and owners. For more information, visit bradfordallen.com.
Chicago’s suburban office market is undergoing a period of intense transformation. But are the headlines about its unending struggles justified? Our latest report challenges the prevailing narrative, revealing a market filled with opportunities. Dive deeper to uncover insights that redefine the competitive landscape—insights the headlines have overlooked.
CHICAGO — Bradford Allen, a national full-service real estate firm, today released its Q1/24 Downtown Chicago Office Market Report showing that CBD average gross asking rents held steady at $43 per square foot. At the same time, the office vacancy rate continued to rise, surpassing 21%, and demand was soft, with negative absorption of 1.4 million square feet.
Leasing volume remained below historic levels, with only 1.3 million square feet leased in the first quarter versus 2.1 million square feet in first-quarter 2023 and 4.9 million square feet in first-quarter 2019, before the pandemic. Continuing a post-pandemic trend, many tenants are seeking prebuilt, move-in ready suites. Last quarter, 38% of leases signed in the CBD were for move-in-ready space. For all of 2023, approximately 33% of leases signed were for move-in-ready suites, compared with 15% in 2019, according to Bradford Allen research.
“The distress in Chicago’s CBD office market is likely to continue as owners, lenders and tenants navigate turbulent market conditions,” said Neil Bouhan, senior managing director, research and communications, for Bradford Allen. “Our data indicates more than half of all square footage leased prior to the pandemic has not yet expired, suggesting that many companies have yet to address their actual space needs in the CBD. This is likely to result in continued downsizing. But even in this environment, owners in the financial position to reinvest in their buildings and negotiate flexible lease terms with tenants have been able to keep their assets well occupied, outperforming the overall market.”
The benefit of financial strength in this market is exemplified by Ivanhoe Capital’s $75 million repositioning of 10 and 120 S. Riverside Plaza, a two-building, 1.4 million-square-foot office complex on the Chicago River in the West Loop. After renovations, Ivanhoe leased 156,000 square feet of office space in the property last year and an additional three leases totaling 75,000 square feet so far this year, with Attorneys’ Liability Assurance Society taking the largest lease at 37,000 square feet.
Other highlights of the Bradford Allen report include:
Bradford Allen researchers estimate there are 23 buildings in the CBD with distressed loans, almost half in the Central Loop. If interest rates remain high, the financial pressure on leveraged owners will mount as $2.8 billion of debt is set to expire by the end of 2025.
Investment sales remained at historic lows, with only $98 million trading last quarter, in line with first-quarter 2023 but still far below the average $750 million in sales in the first quarters of 2015 through 2019. Of the $98 million that has traded so far this year, $60 million was for the sale of 150 N. Michigan Ave., which was purchased by Chicago real estate firm R2.
The amount of sublease space on the market declined last quarter to 7 million square feet but remains at historically elevated levels. Most is large space; for example, a tenant seeking less than 10,000 square feet can only access about 9% of current sublease inventory. Meanwhile, 80% of leases signed in 2023 were for less than 10,000 square feet.
About Bradford Allen:
Bradford Allen (BA) is a commercial real estate firm based in the heart of downtown Chicago. Founded in 2003 by principals Jeffrey Bernstein and Laurence Elbaum as an office brokerage, the firm has grown into a vertically integrated commercial real estate company, offering a full array of services and expertise across multiple U.S. markets to entrepreneurial, corporate and not-for-profit clients, including strategy, marketing and transaction execution for occupiers, investors and owners. For more information, visit bradfordallen.com.
Bradford Allen is pleased to share with you our latest office market report.
The second half of the year in the suburban office market:
Leasing activity remained above pre-pandemic levels with more than 5.2 million s.f. leased through 2023.
Absorption remained negative with -930,000 s.f. absorbed through the back half of 2023, resulting in -1.2 million s.f. of net absorption through the year.
The direct vacancy rate increased to 28.3%.
The average gross asking rate for the market is $27 per s.f.
Ten with Ben is back to showcase the “power of the ask.” Today’s market is all about seizing opportunities through creative negotiation. Current conditions present unique opportunities for tenants to renegotiate leases and for landlords to showcase their financial stability as a major strength. Ben offers actionable insight to both tenants and landlords on how to navigate the market effectively, from securing favorable lease terms to arranging unexpected perks.
This week, Ben gets candid about the lessons he’s learned over twenty years in real estate—and how the best advice always transcends the business. As a proud American Jew, Ben also reminds us to check in on Jewish friends and colleagues as fallout from the war in Israel continues to be felt around the world. Be present for one another—we are in this together.
Prefer the audio? Listen to the MP3 or stream from your favorite podcast provider.
In this week’s episode, Ben reflects on his two-decade-long journey as a tenant rep broker, shares current market conditions, and identifies recent challenges the industry is facing. From the bustling Fulton Market district to new activity throughout the Loop, get an expert view on what’s shaping Chicago’s office landscape. Post-pandemic, the deals may be smaller, but leases are being signed. Ben also touches on the perseverance of brokers, the importance of location to tenants, and just what makes Chicago such a dynamic and resilient city.
In the wake of the unprecedented terrorist attack that ignited war in Israel, we recognize this is a time of immeasurable grief and hardship for many around the world. Ben begins this week’s podcast expressing his feelings with an open discussion about his connection to Israel.
Prefer the audio? Listen to the MP3 or stream from your favorite podcast provider.
CHICAGO, IL — September 6, 2023 — Bradford Allen, a national full-service commercial real estate firm, today announced the leasing of 15,000 square feet at Edens Corporate Center in Northbrook, Illinois, a northern suburb of Chicago. Senior managing director Joel Berger represented ownership in an expansion for MyHome Protection and separate transactions that welcomed Cedar Pine Capital and Beyond Finance to the building.
Current tenant MyHome Protection—which originally took 6,614 square feet of space in November 2022—has completed a direct expansion and extension for 3,641 square feet, which brings its total to 10,255 square feet.
Cedar Pine Capital leased approximately 6,000 square feet of high-end space, citing the quality of the property, its curb appeal, an enticing new amenity center, and the strategic location as prime selling points. The deal was finalized in a direct transaction.
Beyond Finance was quick to seize a 5,500-square-foot move-in-ready suite. This swift move caters to their local executive team, who had previously commuted downtown. Securing the lease within just two weeks, Darryl Silverman of Colliers represented Beyond Finance.
“Since taking on representation of Edens Corporate Center two years ago, our focus has been offering tailored solutions that respond to unique tenant needs,” said Berger. “The quick leasing agreements we’ve secured with Cedar Pine Capital and Beyond Finance are prime examples. Whether it’s high-end, custom spaces or move-in-ready suites for a rapidly expanding business, our approach is resonating with tenants looking for something beyond the typical offerings in the North Suburban market.”
These leases emphasize Edens Corporate Center’s commitment to delivering a superior customer experience—blending urban convenience, curb appeal, and a prime location to meet the high standards of today’s premier businesses.
About Bradford Allen
Bradford Allen is a national commercial real estate firm based in the heart of downtown Chicago. The company offers a full array of brokerage services and expertise to entrepreneurial, corporate, and not-for-profit clients. Services include strategy, marketing, and transaction execution for occupiers, investors, and owners of commercial real estate. Bradford Allen is the brand name of Bradford Allen Realty Services.
New York, NY — November 7, 2022 — Bradford Allen Investment Advisors (BAIA), a subsidiary of Bradford Allen, has announced the acquisition of a two-building, Class A office portfolio located in Greenwich, Conn. The portfolio comprises 1 Lafayette Place and 1 E. Putnam Avenue—both 100% leased—and was sold through a joint venture between Global Gate Capital and Lincoln Property Company. Steve Bardsley, Jeffrey Dunne, and Travis Langer of CBRE represented the sellers.
Situated near Greenwich Avenue in the Central Business District, the 90,268-square-foot, two-building complex includes high-profile, institutional tenants such as Wells Fargo and BlackRock.
“Greenwich is already one of the strongest CBD markets in the country and still holds immense potential. These buildings are examples of the market’s attractive conditions and high demand, and the acquisition reflects our strong belief in the ability of physical office space to remain the central pillar to transacting business,” said Jason Gold, executive managing director at Bradford Allen.
The transaction marks the Chicago-based real estate firm’s first New York-area acquisition in a move that further underscores its commitment to the local market. Bradford Allen opened its first dedicated New York office in 2021, tapping veteran broker Glenn Isaacson to oversee operations. The firm’s New York office is located at 777 Third Avenue in Manhattan.
About Bradford Allen
Bradford Allen (BA) is a national commercial real estate firm based in the heart of downtown Chicago. Founded in 2003 by principals Jeffrey Bernstein and Laurence Elbaum as an office brokerage, the firm has grown into a vertically integrated commercial real estate company, offering a full array of services and expertise across multiple U.S. markets to entrepreneurial, corporate and not-for-profit clients, including strategy, marketing and transaction execution for occupiers, investors and owners. For more information, visit bradfordallen.com.
CHICAGO, IL — Joel Berger and Craig Nadborne, Senior Managing Directors at Bradford Allen, represented Restoration Builders in the relocation and expansion of the repair and restoration company’s Midwest corporate office. Previously located in Elmhurst, Restoration Builders will now office out of a 10,000-square-foot space at 263 Shuman Boulevard in Naperville, Illinois.
Known as The Shuman, the recently redeveloped 350,000-square-foot office building delivers an urban vibe to the suburban office landscape, promising tenants the most comprehensive workplace experience outside of the Chicago CBD. Kellen Monti of JLL represented the building in the sublease of the space.
“We were thrilled to help place Restoration Builders in such a terrific, modern space. The relocation is a great example of what we’re seeing more and more—companies searching out amenity-laden spaces in Class A buildings to entice workers back to the office full time. The Shuman offers an environment that gets tenants excited about coming to work,” said Berger.
The downtown Chicago office market started 2016 off with a flurry of strong activity. Large deal transactions included CNA’s announcement of its relocation to 151 North Franklin for 227,0000 square feet and Cars.com’s transaction to move into 158,000 square feet at 300 S Riverside.
The vacancy rate dropped to 12.0% thanks to over 230,000 square feet of positive absorption. The East Loop contributed the most to this number, with Clark Hill and McDermott, Will & Emery both moving into Prudential Plaza for a total of over 120,000 square feet.
Rental rates remained steady with the direct gross average asking rate ending the quarter at $36.40. A four percent growth year-over-year.
Suburban Office Market Continues to Strengthen; Vacancy and Availability Rates Decrease
The Suburban office market continued to improve going into the 3Q of 2015. The vacancy rate decreased from 18.9% to 17.8% and the availability rate decreased from 24.4% to 22.3% year over year, respectively. While YTD net absorption is essentially flat at negative 27,182 SF thru the mid-year, it is significantly better than the negative 518,096 thru mid-year 2014. Overall these statistics indicate that the suburban market is becoming healthier and more dynamic.
Downtown Market Approaches Equilibrium as the Vacancy Rate Continues to Decrease and Asking Rates Increase
Chicago’s downtown office market is continuing to become tighter. The overall vacancy rate has decreased from 13.4% to 12.6%, year over year. This is the lowest it has been since the end of 2008 and now brings the market almost to equilibrium. Simultaneously Chicago’s unemployment rate continued to improve in the second quarter. According to the Illinois Department of Employment Security, Chicago’s unemployment rate decrease from 7.7% in May 2014 to 6.7%, May 2015.
