REAL ESTATE OUTLOOK
CHICAGO OFFICE MARKET SECOND QUARTER 2016
Chicagoland office remains stable Vacancy steady
Overall vacancy in 2Q16 remained at 15.4% quarter over quarter: CBD at 12.1% and Suburban at 19.3%. Vacancy overall still remains the lowest in eight years and is expected to decrease in the coming months. Confidence in the market is showing as asking rental rates rise across Chicagoland to an overall average of $28.98 Gross PSF (from $28.45 in 1Q16). CBD has reached $34.76 on average while suburban rates are still much lower at $22.35 on average gross. Average CBD rental rates are higher than pre-recession levels while suburban rates still lag by $1.00 or more per square foot from pre-recession asking prices.
CBD T RENDS 5- YE A R TR E ND
C U R R E NT Q UART E R
VAC A N C Y
12.1% ABSORPTION
(60,239) SF R E N TA L R AT E
$34.76 PSF
ECONOM Y
Unemployment volatile in Chicago Chicago Metro has added approximately 70,540 jobs to the local economy year over year (as of May 2016). Current Chicago Metro unemployment rate is 5.5%, higher than the national average of 4.7% but a significant improvement year over year from 5.9%. Leisure and Hospitality industries (3.5% increase) have enjoyed the highest increases year over year and Construction (3.1% increase) follows closely behind. Major office users in Chicago such as Professional/Business Services and Government, only had a 1.6% and 1.3% increase year over year respectively. Information and Financial sectors reported decreases in jobs over the period.
UNDER CONSTRUC TION
3.95 million SF S U BU RBA N T RENDS 5- YE A R TR E ND
C U R R E NT Q UART E R
VAC A N C Y
15.4% ABSORPTION
78,600 SF
S U P P LY A N D D E V E L O P M E N T
Two new additions to downtown developments 625 W Adams St in the West Loop and 1053 W Lake St in River West were added to the list of new constructions in CBD this quarter. That brings the total to four Class A buildings in the West Loop and two in River West under construction. Of the total 3.95 million SF being built, 1.61 million SF (40%) is still available. Similarly, less than 20% of the two major high rises in the West Loop, (444 W Lake St & 150 N Riverside) remain currently available.
R E N TA L R AT E
$22.35 PSF UNDER CONSTRUC TION
22,144 SF CHICA GOL A ND 5- YE A R TR E ND
C U R R E NT Q UART E R
AV E R AG E S A L E P R I C E
$168.68 PSF
CHICAGO OFFICE MARKET SECOND QUARTER 2016
DEMAND
UNEMPLOYMENT RATE
Overall net absorption dipped in 2Q16
METRO CHICAGO
UNITED STATES
12% 10% 8% 6% 4% 11
12
13
14
15
16
CAP RATES METRO CHICAGO
UNITED STATES
8.0%
Chicagoland net absorption for 2Q16 was 18,361 SF. CBD took a negative absorption hit of (60,239) SF. Class A in the Central Loop and Class A and B in the West Loop had the most negative absorption downtown. This is largely due to reshuffling and consolidation of space in the area which put many smaller suites under 10,000 SF back into vacant inventory. Absorption is expected to be positive in the coming months as tenants such as Conagra, Beam, and Ulta occupy their new spaces. In the suburbs, the North Suburban submarket had the most negative absorption across all classes at (136,634) SF. This suburban submarket has struggled this year as CDW Corporation moved out of the area, followed by a host of smaller tenants (under 5,000 SF) relocating as well. VAC A N C Y
Vacancy rates steady The Chicago Metro vacancy rate remained at 15.4% quarter over quarter. Although absorption dipped, it did not make a major impact on overall vacancy. CBD remained at 12.1% while suburban vacancy increased 20 basis points to 19.3%. Overall inventory count increased slightly in CBD causing vacancy to remain the same as well.
7.5% 7.0% 6.5% 6.0% 11
12
13
14
15
16 R E N TA L R AT E S
YEAR-OVER-YEAR EMPLOYMENT CHANGE U.S.
CHICAGO
4% 3% 2% 1% 0%
CBD at all time high while Suburban continues to climb Gross asking rates in all of Chicagoland is approaching the $30 mark, currently at $28.98. This is the highest gross for all of Chicagoland in more than 10 years. The CBD average gross asking rate reached a new pinnacle at $34.76 PSF this quarter, surpassing all pre-recession watermarks. Suburban asking averages, now at $22.35 PSF, still has room to grow in order to reach a pre-recession normalization of the market. It is expected to continue to increase over the next few months.
Other Services
Manufacturing
Financial Activities
Information
Mining & Logging
Construction
Leisure & hospitality
Government
Education and Health Services
Professional & Business Services
Total Nonfarm
-2%
Trade, transportation and utilities
-1%
Metro Chicago Office Market Indicators INVENTORY
UNDER CONSTRUCTION
Q2 NET ABSORPTION
YTD NET ABSORPTION
DIRECT VACANCY
SUBLET VACANCY
TOTAL VACANCY
Class A
147,719,485
Class B
107,842,861
3,168,634
67,895
382,508
13.6%
1.0%
14.6%
$33.55
310,072
-165,426
-77,117
16.1%
1.4%
17.5%
$24.25
Class C
24,492,006
0
115,892
117,557
10.9%
0.3%
11.2%
$22.31
Metro Chicago Total 280,054,352
3,478,706
18,361
422,948
14.3%
1.1%
15.4%
$28.98
PROPERTY CLASS
R E AL E STATE OUTLOOK CHIC AGO O FFIC E MARKET Q2 2016
AVERAGE RATE PSF
2
CHICAGO OFFICE MARKET SECOND QUARTER 2016
INVESTMENT MARKET
Chicago remains on investors’ radar As growth and productivity have slowed nationally, it was expected that investors would be more cautious in acquiring or building new assets. However, positive fundamentals in Chicago, including continued rent growth coupled with rock-bottom borrowing costs, has supported continued investment in Chicago and the suburbs albeit at a slower rate. A few properties did sell with a significant return on their investment. 1000 W Fulton St, or 1K Fulton, Google’s Midwest headquarters, sold for $257.0 million ($484 PSF) a profit to Sterling Bay, who originally purchased the cold storage building for $12 Million in 2012. Even considering the significant amount of capital to convert the building to its current office use (estimated at $129 million), the yield in such a short period is significant. Fewer properties have changed hands in Chicago so far in 2Q16 than last year. This trend has resulted more from the bid-ask spread being too large than waning interest. Amongst growing sentiment that the office market may have reached its peak this year, some sellers are anxious to regain some profit on assets they may have purchased during the peak of the last real estate cycle in 2006 and 2007. As yields on core assets in the CBD have remained historically low, there has been some shift in investor interest to more core plus and value add investments as well as increased interest in Class A suburban assets.
METRO CHICAGO NET ABSORPTION AND VACANCY NET ABSORPTION MILLION SF
VACANCY
2.0
20%
1.5
18%
1.0
16%
0.5
14%
0
12%
-0.5
10%
-1.0
11
13
12
14
15
8%
16
METRO CHICAGO AVERAGE ASKING RENTAL RATES CLASS A
CLASS B
CLASS C
$35
$30
$25
$20
OUTLOOK
Market will remain steady and cautiously optimistic It is expected that vacancy will continue to decline in the next few months, however at a much slower pace than in 2015. Landlords are still pushing the envelope with effective rates and asking rates will continue to increase as well, especially in CBD Class A assets. New development in Chicago will continue in a disciplined manner. Even as new projects come on line by end of the year, it will not add significant vacancy to the market as many have been preleased and vacancies created by relocating tenants are already slated for new occupancy. Considering recent disruptions in global markets, US property markets have retained a reputation for long-term stability; Chicago’s steady fundamentals support investors’ cautious view.
$15
11
12
13
14
15
16
METRO CHICAGO DEVELOPMENT PIPELINE MILLION SF CONSTRUCTIONS
COMPLETED
PRELEASED
AVAILABLE
5m 4m 3m 2m 1m 0
R E AL E STATE OUTLOOK CHIC AGO O FFIC E MARKET Q2 2016
11
12
13
14
15
16
3
CHICAGO OFFICE MARKET SECOND QUARTER 2016
CBD Market
Tenants are staying but may be consolidating as they renew CBD vacancy stands at 12.1% in 2Q16. The lowest and only single-digit overall vacancy rate remains in the River North submarket with 7.6%. Many River North companies are reconfiguring current office layouts or expanding slightly to avoid having to move from this trendy area. Considering the migration of tech companies to this submarket, office benching is increasing as vacancy gets tight. Where 150-180 SF may have been allocated per employees, it now stands at 110-120 SF per head. However, with the growth in tech tenants, landlords in River North are also seeing shorter term leases as their tenants know they if they expand, River North will not be able to meet their needs in the long run. Credit remains a concern with many of these tenants for landlords. CBD net absorption was negative (60,239) SF. Mostly contributing to this marginal negative absorption were the Central and West Loop submarkets. This is not an indicator of low interest in these areas but rather of high renewal and consolidations in the area. One such example was Publicis giving back two floors at the Leo Burnett building in the Central Loop, yet extending its lease of 642,545 SF through 2026. Valence Health, located at 540 W Madison St, is subleasing two of three floors (more than 80,000 SF). It is widely expected that these vacancies will be absorbed by the end of the year given the tight market for Class A space.
CBD NET ABSORPTION AND VACANCY NET ABSORPTION MILLION SF
VACANCY
2.0
18%
1.5
16%
1.0
14%
0.5
12%
0
10%
-0.5 -1.0
8%
11
12
13
14
15
6%
16
CBD AVERAGE ASKING RENTAL RATES CLASS A
CLASS B
CLASS C
$45 $40 $35 $30 $25 $20 $15
11
12
13
14
15
16
CBD asking gross rental rates reached $34.76 PSF; a $.57 increase quarter over quarter. The Central Loop and West Loop
R E AL E STATE OUTLOOK CHIC AGO O FFIC E MARKET Q2 2016
4
CHICAGO OFFICE MARKET SECOND QUARTER 2016
were highest overall with $35.20 and $38.05 respectively despite their negative absorption this quarter. The rise is benefiting both class A and class B assets. In strictly class A inventory, River North and the West Loop dominate in asking rents at an unthinkable rate of $42.91 PSF and $41.43 respectively.
SECOND QUARTER SELECT LEASE ACTIVITY
TENANT
PROPERTY
Computer Systems Institute
29 E Madison St
30,585
Publicis
35 W Wacker Dr
642,545
Renewal & Extension
McDonald's
110-134 N Carpenter St
330000
New Construction/Redev.
Chicago Housing Authority
333 S Wabash Ave
155,749
Renewal
Constellation Brands
131 S Dearborn St
130,000
Relocation & Expansion
Suburban headquartered companies continue to move downtown. McDonald’s very publicly announced it is ditching Oakbrook to occupy the soon to be redeveloped 330,000 SF site at 110-134 N Carpenter St/1058 W Washington Blvd (former Harpo studios).
Beam, Inc.
222 Merchandise Mart Plz
70,000
Sublease
Lurie Children's Hospital
211 E Chicago Ave
68,082
New
Korn Ferry Intl
233 S Wacker Dr
55,362
Renewal
InTouch Solutions
205 N Michigan Ave
55,113
Renewal
Winston & Strawn
35 W Wacker Dr
53,821
Renewal & Extension
Glassdoor
1330 W Fulton St
51,500
New
McGraw-Hill Companies
130 E Randolph St
48,452
New
Two new developments, 444 W Lake St and 150 N Riverside, which will add nearly 2.3 million SF to the inventory by end of 2016 and beginning of 2017), will not negatively impact vacancy and overall market conditions as 80% or so has been pre-leased. With $35.00 asking net rent as a starting number, these buildings will certainly raise the bar in office pricing downtown.
Regional Transportation Authority
175 W Jackson Blvd
41,370
Renewal
Press Ganey Assoc Inc
1 N Franklin St
34,000
Renewal & Expansion
Civis Analytics
200 W Monroe St
29,079
New
Horton Group
500 W Monroe St
26,751
Sublease
Textura
130 E Randolph St
23,374
New
Piper Jaffray & Co.
444 W Lake St
20,534
New
SPINS, LLC
222 W. Hubbard
20,500
New
West Monroe Partners
227 W Monroe St
20,000
New
The CBD office market has recovered nicely and will continue to enjoy decreases in vacancy and increases in rental rates over the next few quarters. However, CBD is not expected to have any major absorptions from companies outside of Illinois until Cook County gets its financial house in order in regards to budget constraints, increased taxes, and lack of money to lure businesses to Chicago. Companies headquartered in the suburbs may soon be priced out of the market and find it difficult to justify the cost to move downtown. Intramarket expansion is nearing the end of its cycle, so the best way for the Chicago to continue its upward office occupancy trend is to attract businesses outside of Illinois and advance policies that support new and existing businesses.
SECOND QUARTER SELECT SALE ACTIVITY
BUYER
R E AL E STATE OUTLOOK CHIC AGO O FFIC E MARKET Q2 2016
SIZE (SF)
PROPERTY
SIZE (SF)
SALE PRICE
PSF
440 S La Salle St
TYPE
Renewal
1,019,325
$191,000,000
$187
CIM Group
1 S State St
942,330
$250,789,747
$266
ELAD Group
1000 W Fulton St
531,194
$257,000,000
$484
American Realty Advisors
1460 N Halsted St
221,851
$130,000,000
$586
LaSalle Investment JV Universal-Investment OBO BVK
1217-1227 W Washington Blvd
50,000
$4,450,000
$89
420 W Huron St
30,918
$5,210,000
$169
Level Office
401 W Superior St
30,000
$4,960,000
$165
401 West Superior Holdings
Peppercorn Capital, LLC
5
CHICAGO OFFICE MARKET SECOND QUARTER 2016
R E AL E STATE OUTLOOK CHIC AGO O FFIC E MARKET Q2 2016
6
CHICAGO OFFICE MARKET SECOND QUARTER 2016
CBD Office Market Indicators VACANCY SF
VACANCY RATES
INVENTORY
UNDER CONSTRUCTION
Q2 NET ABSORPTION
YTD NET ABSORPTION
DIRECT
SUBLEASE
DIRECT
SUBLEASE
OVERALL
AVERAGE RATE PSF
Class A
22,135,135
0
-230,603
-2,262
2,139,044
215,277
9.7%
1.0%
10.6%
$38.23
Class B
13,202,898
0
-54,899
-50,017
2,218,344
105,831
16.8%
0.8%
17.6%
$31.56
Class C
1,958,766
0
43,441
46,149
121,732
18,776
6.2%
1.0%
7.2%
$25.50
37,296,799
0
-242,061
-6,130
4,479,120
339,884
12.0%
0.9%
12.9%
$35.20
Class A
16,631,127
0
50,066
198,834
2,287,772
95,311
13.8%
0.6%
14.3%
$34.60
Class B
6,182,889
0
-59,308
-96,070
837,555
20,112
13.5%
0.3%
13.9%
$29.07
SUBMARKET
Central Loop
Class C
3,962,000
0
21,020
23,189
317,876
8,385
8.0%
0.2%
8.2%
$26.98
26,776,016
0
11,778
125,953
3,443,203
123,808
12.9%
0.5%
13.3%
$32.19
Class A
7,091,850
0
56,912
4,557
933,469
117,724
13.2%
1.7%
14.8%
$36.93
Class B
4,117,842
0
-6,037
41,954
423,740
65,069
10.3%
1.6%
11.9%
$30.35
Class C
1,526,998
0
25,399
24,599
129,908
3,250
8.5%
0.2%
8.7%
$25.27
East Loop
N. Michigan Ave
12,736,690
0
76,274
71,110
1,487,117
186,043
11.7%
1.5%
13.1%
$33.41
Class A
3,991,073
0
23,400
-83,264
271,261
0
6.8%
0.0%
6.8%
$42.91
Class B
11,048,441
0
169,651
30,461
794,363
87,734
7.2%
0.8%
8.0%
$29.83
Class C River North
2,717,278
0
3,262
20,523
164,316
23,915
6.0%
0.9%
6.9%
$27.02
17,756,792
0
196,313
-32,280
1,229,940
111,649
6.9%
0.6%
7.6%
$32.34
Class A
689,067
55,002
32,670
32,670
25,590
6,700
3.7%
1.0%
4.7%
$39.50
Class B
2,381,613
287,928
-24,957
-45,715
401,945
10,738
16.9%
0.5%
17.3%
$28.35
Class C
1,707,787
0
10,739
-10,340
190,305
9,800
11.1%
0.6%
11.7%
$26.49
4,778,467
342,930
18,452
-23,385
617,840
27,238
12.9%
0.6%
13.5%
$29.29
Class B
743,908
0
-2,588
2,933
156,374
2,588
21.0%
0.3%
21.4%
$23.88
Class C
1,066,339
0
-3,431
-3,431
48,864
0
4.6%
0.0%
4.6%
$23.48
1,810,247
0
-6,019
-498
205,238
2,588
11.3%
0.1%
11.5%
$23.64
Class A
33,443,921
3,612,102
-41,497
-113,210
3,320,634
467,621
9.9%
1.4%
11.3%
$41.43
Class B
12,625,577
0
-68,472
-10,272
1,570,735
197,307
12.4%
1.6%
14.0%
$31.47
River West
South Loop
Class C
2,403,550
0
-5,007
-25,074
251,226
0
10.5%
0.0%
10.5%
$25.59
48,473,048
3,612,102
-114,976
-148,556
5,142,595
664,928
10.6%
1.4%
12.0%
$38.05
Class A
83,982,173
3,667,104
-109,052
37,325
8,977,770
902,633
10.7%
1.1%
11.8%
$38.91
Class B
50,303,168
287,928
-46,610
-126,726
6,403,056
489,379
12.7%
1.0%
13.7%
$30.49
Class C
15,342,718
0
95,423
75,615
1,224,227
64,126
8.0%
0.4%
8.4%
$26.11
149,628,059
3,955,032
-60,239
-13,786
16,605,053
1,456,138
11.1%
1.0%
12.1%
$34.76
West Loop
DOWNTOWN
R E AL E STATE OUTLOOK CHIC AGO O FFIC E MARKET Q2 2016
7
CHICAGO OFFICE MARKET SECOND QUARTER 2016
Suburban Market
Tenants are staying but may be consolidating as they renew Overall suburban vacancy rates increased 20 basis points to an average of 19.3% in 2Q16. Suburban absorption although positive at 78,600 SF net occupied, it was significantly less than in 1Q16 (358,134 SF). The majority of the positive absorption in 2Q16 has been in in Class A product particularly in the Northwest, Eastern East West, and even South Suburban submarkets. Confidence in the future for suburban submarkets has increased with positive indicators such as US Cellular renewing and expanding into 331,797 SF at 8410-8430 W Bryn Mawr Ave in the O’Hare submarket. An additional large suburban move is Paylocity Holding’s relocation and expansion into 309,000 SF at 1400 & 1450 American Lane, Schaumburg. Suburban office rental rates increased overall to $22.35 PSF in 2Q16 from $21.98 PSF in 1Q16. Class A product is seeing the majority of the increases especially in the Eastern East West submarket (currently at $28.16 PSF Class A) and in O’Hare where Class A rental rates reached to $30.03 PSF. Existing landlords are seeing the value in improvements to their Class A campuses as existing tenants are remaining in their spaces and paying for the amenities. Suburban landlords are also offering better overall concession packages to existing tenants that would not be offered by landlords of equivalent space downtown.
R E AL E STATE OUTLOOK CHIC AGO O FFIC E MARKET Q2 2016
SUBURBAN NET ABSORPTION AND VACANCY NET ABSORPTION SF
VACANCY
750k
24%
500k
22%
250k
20%
0
18%
-250k
16%
-500k
14%
-750k
11
12
13
14
15
12%
16
SUBURBAN AVERAGE ASKING RENTAL RATES CLASS A
CLASS B
CLASS C
$30
$25
$20
$15
$10
11
12
13
14
15
16
8
CHICAGO OFFICE MARKET SECOND QUARTER 2016
As was in the case with CBD submarket, less office product changed hands with investors in suburban outliers as well. The trend in the suburbs remains Class A product that are highly occupied are what is currently being sold. However, well-located groups of buildings or office campuses are also popular: as was the case this quarter with both 3,6,9 Pkwy N. Deerfield and 2301-2311 W 22nd St, Oak Brook. Investors are cautiously optimistic in the suburbs as they are in the CBD but are tempering risk with well-known assets. No new major developments are on the horizon in the suburban landscape that will change the landscape or increase vacancy in suburban submarkets. The occasional exception are smaller, welllocated property such as 301 S Main St in Naperville (currently under construction) that is built for immediate need and will be occupied by smaller tenants. All other construction in suburban office are owner/ user spec development fully pre-leased or major medical buildings which do affect the competitive office inventory. Demand has moderately increased in the suburban submarkets over the past few years since 2010 and it is expected to continue through 2016.
R E AL E STATE OUTLOOK CHIC AGO O FFIC E MARKET Q2 2016
SECOND QUARTER SELECT LEASE ACTIVITY
TENANT
PROPERTY
SIZE (SF)
US Cellular
8410-8420 W. Bryn Mawr Ave, Chicago
331,797
Renewal & Expansion
Paylocity Holding
1400 & 1450 American Lane, Schaumburg
309,000
Relocation & Expansion
183,000
New Construction
American Academy of Pediatrics Hamilton Lakes Business Park, Elk Grove Village
TYPE
Combined Insurance
8750 W Bryn Mawr Ave, Chicago
92,166
New
Valent BioSciences
600 N US Highway 45, Libertyville
85,000
Relocation
The School Association for Special Education in DuPage
2900 Ogden Ave, Lisle
30,000
Consolidation
Turtle Wax
2250 W Pinehurst Blvd, Addison
25115
New
JMG Financial Group
2001 Butterfield Rd, Downers Grove
23000
Expansion
Keyence
500 Park Blvd, Itasca
70,395
New
Arthur J. Gallagher
2900 Golf Rd, Rolling Meadows
48,000
New
SASED
2900 Ogden Ave, Lisle
30,039
New
TreeHouse Foods
2001 Spring Rd, Oak Brook
24000
New
JMG Financial Group
2001 Butterfield Rd, Downers Grove
23,029
New
Fresenius Kadi
1475 E Woodfield Rd, Schaumburg
22,578
New
Paychex
27545 Diehl Rd, Warrenville
22,218
New
SECOND QUARTER SELECT SALE ACTIVITY
PROPERTY
SIZE (SF)
SALE PRICE
PSF
BUYER
1301 W Central Rd, Schaumburg
517,000
$80,000,000 $155
Oak Street RE Capital
3,6,9 Pkwy N. Deerfield
473,328
$80,000,000 $169
Fulcrum Asset Advisors JV True North Mgmt Group
4709 Golf Rd, Skokie (Concourse Plaza)
293,280
$29,750,000 $101
Klairmont Enterprises
2301-2311 W 22nd St, Oak Brook
180,000
$24,000,000 $133
American Landmark Properties
500 Davis St, Evanston
127,000
$18,000,000 $142
Steelbridge Capital JV The Family Office
9
CHICAGO OFFICE MARKET SECOND QUARTER 2016
R E AL E STATE OUTLOOK CHIC AGO O FFIC E MARKET Q2 2016
10
CHICAGO OFFICE MARKET SECOND QUARTER 2016
Suburban Office Market Indicators VACANCY SF
VACANCY RATES
INVENTORY
UNDER CONSTRUCTION
Q2 NET ABSORPTION
YTD NET ABSORPTION
DIRECT
SUBLEASE
DIRECT
SUBLEASE
OVERALL
AVERAGE RATE PSF
Class A
10,397,691
0
64,647
69,562
1,623,340
63,261
15.6%
0.6%
16.2%
$28.16
Class B
12,733,249
0
-29,019
44,365
2,281,599
326,211
17.9%
2.6%
20.5%
$19.06
Class C
1,419,730
0
29,690
31,271
190,844
7,011
13.4%
0.5%
13.9%
$15.54
24,550,670
0
65,318
145,198
4,095,783
396,483
16.7%
1.6%
18.3%
$22.71
SUBMARKET
Eastern East West Class A
6,089,974
0
-2,360
11,761
748,940
10,020
12.3%
0.2%
12.5%
$26.24
Class B
12,014,745
22,144
3,598
137,964
2,025,632
521,441
16.9%
4.3%
21.2%
$19.57
Class C
1,555,048
0
3,816
9,887
140,893
0
9.1%
0.0%
9.1%
$17.09
Western East West
19,659,767
22,144
5,054
159,612
2,915,465
531,461
14.8%
2.7%
17.5%
$21.44
Class A
18,814,406
0
-61,796
-138,101
3,972,079
220,978
21.1%
1.2%
22.3%
$27.80
Class B
9,623,310
0
-50,664
-87,646
1,406,015
50,742
14.6%
0.5%
15.1%
$20.23
Class C
2,341,936
0
-24,174
-31,384
252,799
0
10.8%
0.0%
10.8%
$16.83
North Suburban
30,779,652
0
-136,634
-257,131
5,630,893
271,720
18.3%
0.9%
19.2%
$24.60
Class A
19,872,798
0
163,815
356,580
3,547,260
236,705
17.8%
1.2%
19.0%
$23.41
Class B
12,680,087
0
-11,979
-27,759
2,956,185
67,437
23.3%
0.5%
23.8%
$17.18
Class C
1,481,453
0
1,919
14,032
259,321
14,500
17.5%
1.0%
18.5%
$15.12
34,034,338
0
153,755
342,853
6,762,766
318,642
19.9%
0.9%
20.8%
$20.73
Class A
7,461,413
0
-24,853
5,968
919,014
46,550
12.3%
0.6%
12.9%
$30.03
Class B
5,361,801
0
-41,829
-17,622
1,419,392
4,426
26.5%
0.1%
26.6%
$18.91
Class C
791,476
0
-3,130
3,606
339,399
0
42.9%
0.0%
42.9%
$14.76
Northwest
O’Hare
13,614,690
0
-69,812
-8,048
2,677,805
50,976
19.7%
0.4%
20.0%
$24.76
Class A
1,101,030
0
37,494
39,413
272,322
9,247
24.7%
0.8%
25.6%
$20.97
Class B
5,126,501
0
11,077
307
912,885
4,500
17.8%
0.1%
17.9%
$17.51
Class C
1,559,645
0
12,348
14,530
259,287
0
16.6%
0.0%
16.6%
$15.16
7,787,176
0
60,919
54,250
1,444,494
13,747
18.5%
0.2%
18.7%
$17.53
South Suburban Class A
63,737,312
0
176,947
345,183
11,082,955
586,761
17.4%
0.9%
18.3%
$26.48
Class B
57,539,693
22,144
-118,816
49,609
11,001,708
974,757
19.1%
1.7%
20.8%
$18.80
Class C SUBURBAN
9,149,288
0
20,469
41,942
1,442,543
21,511
15.8%
0.2%
16.0%
$15.93
130,426,293
22,144
78,600
436,734
23,527,206
1,583,029
18.0%
1.2%
19.3%
$22.35
CONTACT
METHODOLOGY
Sandy McDonald Director of Market Research 312.881.7047
[email protected]
Inventory defined as existing Class A, B and C office properties, 20,000 square foot minimum rentable base area. Overall vacancy inclusive of direct and sublease space. Net absorption defined as the change in physical occupancy from one period to the next. Average asking rents are direct gross per square foot, per year and are overall averages are weighted against total inventory.
200 West Madison Street, Suite 1200 Chicago, Illinois 60606
T 312.881.7000 F 312.881.7085 www.transwestern.com/chicago
Copyright © 2016 Transwestern. All rights reserved. No part of this work may be reproduced or distributed to third parties without written permission of the copyright owner. The information contained in this report was gathered by Transwestern from CoStar and other primary and secondary sources believed to be reliable. Transwestern, however, makes no representation concerning the accuracy or completeness of such information and expressly disclaims any responsibility for any inaccuracy contained herein.