Tag Archives: suburban

Mid-Year 2013 Chicago Suburban Office Market Report

Published July 1, 2013
Chicago Suburban Mid-Year Market Report 2013

Improving Suburban Chicago Office Market Remains Tighter Than Statistics Suggest

The suburban Chicago office market continued to improve during the first six monthsof the year. The overall, direct vacancy and sublease availability all slightly decreased to 18.3%, 17.4% and 2.7%, respectively. Although, the overall vacancy remains elevated at 18.3%, the real dynamics reflect those of a much tighter market, perhaps one with a vacancy rate as low as 13%. A good portion of the space that sits physically vacant today is “The Last Mile” of space—perhaps 5-10% of any given property—where landlords have a diminished desire to be aggressive to get the last deals done. As a result, this skews the overall statistics.
 

First Quarter 2013 Chicago Suburban Office Market Report

Published March 1, 2013

Suburban Chicago Office Market Signals Steady—Albeit Slow—Improvement

Transaction activity within the suburban Chicago office market was relatively steady to begin the year, and a healthier tone continues to characterize the overall suburban market. Although the vacancy rate edged up during the first quarter from 18.3% to 18.6%, there continues to be ample interest from tenants for high quality space. Many tenants have been motivated to upgrade their space rather than renew, particularly in situations where attractive rents and/or concessions can help offset relocation costs.
 

Fourth Quarter 2012 Chicago Suburban Office Market Report

Published December 1, 2012

Momentum Continues Building for the Improving Suburban Chicago Office Market

Transaction activity within the suburban Chicago office market accelerated during the second half of the year, and 2012 finished on a positive note. This improvement was echoed in most of the major market statistics, particularly the vacancy and absorption rates. The overall vacancy rate declined and ended the year at 17.3% as compared to 19.3% at the 2011 year end. The strong leasing activity in the fourth quarter also resulted in more than 450,000 SF of positive net absorption, bringing the full year positive net absorption to more than 1.2 million SF.

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Third Quarter 2012 Chicago Suburban Office Market Report

Published August 4, 2012

Third Quarter Transaction Activity Heats Up In Suburban Chicago Office Market

After cooling off during the first half of 2012, activity within the suburban Chicago office market accelerated during the third quarter. The increased confidence among large tenants was evidenced in a spate of noteworthy transactions. This was driven largely by a continued trend toward quality space where tenants are locking-in Class A locations at attractive pricing. The improving suburban office market conditions were illustrated by several key market metrics.

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Second Quarter 2012 Chicago Suburban Office Market Report

Published June 4, 2012

Suburban Chicago Office Market Cools Off During First Half of 2012

The suburban Chicago office market hit a plateau during the first half of 2012. The overall availability rate has remained unchanged from the first to the second quarter of 2012, resulting in a mid-year figure of 27.3%. This remains slightly higher than the 26.8% statistic at year-end 2011. The overall vacancy rate also remained stable during the second quarter at 23.2%.

During 2011 there were many large tenant relocations that reflected both pent up demand coming out of the financial crisis, as well as the plentiful availability of attractive second-generation space. In many cases, this space was not only well located in Class A buildings, but it also included furniture and upgraded wiring. This added significant appeal and helped motivate tenants to make longer-term commitments.

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First Quarter 2012 Chicago Suburban Office Market Report

Published March 4, 2012

Suburban Chicago office market takes a breather during first quarter 2012

The suburban Chicago office market ended 2011 on a high note, perhaps compensating for several years of pent up demand. As we previously reported, the overall tone of the market was much healthier despite a lingering supply and demand imbalance. Corporate tenants showed decidedly more confidence in making real estate commitments, and that was reflected in the more robust 2011 transaction activity.

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Third Quarter 2011 Chicago Suburban Office Market Report

Published September 4, 2011

Status quo for the Suburban Chicago office market

The third quarter served up more of the same for the suburban Chicago office market. That’s not necessarily all bad news, but the move back to equilibrium looks to be progressing at a glacial pace. The overall availability rate has shown little fluctuation throughout 2011 and ended the third quarter at 27.3%. The direct vacancy rate actually inched back up slightly to 24.6% from 24.2% at mid-year.

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Second Quarter 2011 Chicago Suburban Office Market Report

Published June 4, 2011

Overall tone of suburban Chicago office market slowly improves, but market dynamics still favor tenants

From the perspective of transaction activity and general interest in suburban Chicago office space, it is clear that the market has stabilized and improved since the depths of the financial crisis. However, the recovery continues to be slow and uneven. Overall demand and availability rates have not returned to pre-crisis levels. There continue to be some positive signs in the market, but the second quarter showed little material change as compared to the first quarter. The overall vacancy rate improved slightly and ended the second quarter at 23.0%.

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First Quarter 2011 Chicago Suburban Office Market Report

Published March 4, 2011

Signs of slow improvement continue to emerge in suburban Chicago, particularly in Class A Space

Although the Chicago suburban office market appears to have stabilized, there is no escaping that significant excess supply, both direct and sublease space, continues to overhang the market. The good news is that leasing activity, which re-emerged and accelerated last year, helped stem the deterioration in market fundamentals. It was encouraging to see that trend continue early this year. A healthier level of demand was evident throughout the first quarter, which helped push the overall availability rate down to 27.3%, which is an improvement from the year-end availability rate of 28.1%. The direct vacancy rate ended the quarter at 23.3%.

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Fourth Quarter 2010 Chicago Suburban Office Market Report

Published December 4, 2010

Despite sluggish leasing market, market fundamentals show signs of stabilization

The Chicago suburban office market appears to have reached its bottom in 2010.  The overall annual net absorption (the net change in occupied space) and the year-to-date leasing activity seem to indicate that the market has begun to slowly recover.  Annual net absorption was essentially flat in 2010, but still a clear reversal of the downward trend experienced in 2009, when the year ended with over 2.3 million square feet of negative net absorption.

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Second Quarter 2010 Chicago Suburban Office Market Report

Published June 4, 2010

Office Market is Navigating Bottom of Downturn
New buyers help spur office sales as asset prices are established

Available Space Starting to Steady
Declining availability is one indication the Chicago suburban office market is approaching, or is at the bottom of, the downturn that began in 2008. Overall availability, following eight consecutive quarters of raises, declined for the second straight quarter to 26.1%, a 0.3 percentage point decrease from the first quarter and a 1.0 percentage point drop since year-end 2009. Sublease space declined as well, to 2.3%, down from 2.5% in first quarter, and 2.7% from the end of 2009. The potential stability is positive for this market that has been in bad shape since the downturn started; however for availability to consistently decline, large office users will have to re-emerge in a market currently driven by users requiring 10,000 square feet (sf) or less.

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First Quarter 2010 Chicago Suburban Office Market Report

Published March 4, 2010

Indicators Show Bottom Is Near
Certain micro-markets begin to show turnaround

Vacancy Continues to Rise
Overall vacancy in the suburban market rose to 24.0% in the first quarter of 2010, a 2.6 percentage point increase compared to the same time in 2009 and a 0.3 percentage point rise since year-end 2009. The North Suburbs has been hit the hardest over the last year, measuring a 5.7 percentage point increase to 21.9% when compared to first quarter 2009. Meanwhile, the Northwest Suburbs has fared the best with a modest gain in vacancy, increasing 1.9 percentage points to 26.1% when compared to first quarter 2009.

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Fourth Quarter 2009 Chicago Suburban Office Market Report

Published December 4, 2009

Market Downturn Creates Opportunities for Tenants
Suburban market downturn likely to last through 2010

Year-End Vacancy Highest of Decade
Overall vacancy in the suburban market rose to 17.7% in the fourth quarter of 2009, a 1.9 percentage point increase compared to the same time in 2008. The Northwest Suburbs submarket was hit the hardest, measuring a 3.1 percentage point increase to 18.7% when compared to the previous year. While overall vacancy in the suburban market is still on the rise, sublease vacancy reported a 0.1 percentage point decrease in 2009 indicating the bottom could be near. This is a positive sign for a market largely hit by corporate downsizing and consolidations.

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Second Quarter 2009 Chicago Suburban Office Market Report

Published June 4, 2009

A Slow Road to Recovery in the Suburbs
With available space at an all time record, office space bargains are everywhere.  Vacancy is likely to rise slightly over the next few quarters during the recovery.

Rental Rates Hold Steady
Asking rental rates in the suburban market have held nearly even with last quarters’ rates. The second quarter gross average asking rental rate of $20.57 represents a rise of four cents per square foot over the first quarter. With record availability rates and continued layoffs throughout the suburbs, rates are likely to continue to drop.

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First Quarter 2009 Chicago Suburban Office Market Report

Published March 4, 2009

Market Continues to Decline
Rental rates continue to drop, and vacancies are increasing at a faster rate. With no signs of recovery before 2010, landlords offer larger concessions.

Rental Rates Are Dropping
Asking rental rates in all suburban submarkets continue to drop as Landlord’s adjust to the new economic climate and compete against the growing flood of sublease space . The first quarter gross average asking rental rate of $20.53 represents a drop of nearly $0.50 per square foot over the last three quarters. As layoffs increase and sublease space continues to rise over the next few months, asking rates are likely to drop further.

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