Research & Forecast Report
SUBURBAN CHICAGO | OFFICE Third Quarter 2016
Vacancy Rises Once Again Ronna Larsen Research Manager | Suburban Chicago
After showing improvement in the second quarter, the suburban Chicago office market witnessed a setback in the third quarter of 2016. The suburban Chicago office market took a hit in the third quarter of 2016. Only 236,000 square feet of notable new lease transactions (50,000 square feet or greater) were signed in the third quarter compared to 592,000 square feet in the second quarter of 2016.
Trends While the velocity of large tenants in the market continues to dissipate heading into the fourth quarter of 2016, there are numerous mid-sized tenants out in the market. Currently 75 tenants ranging from 10,000 to 50,000 square feet are actively seeking space, with a large representation coming from the East-West portion of the market. Well-capitalized buildings in the suburbs continue to focus on tenant improvements and increased amenities such as structured parking, power to accommodate the modern tenant, employee wellness / fitness centers, delis, tenant lounges and conference centers. These amenities cater to the younger generation, making higher-end Class A space a hot commodity. Investment and user sales throughout the suburban office market continues to rise as 11 assets traded in the third quarter, including Zeller Realty Group’s two-building, 647,216-square-foot portfolio purchase of Woodfield Preserve in Schaumburg which sold for $73.5 million and Sperry Commercial’s $32.0 million purchase of Woodfield Corporate Center, a two-building, 532,973-square-foot asset also in Schaumburg. In addition, several assets were added to the market in the third quarter and six properties are under contract.
Vacancy
Market Indicators Relative to prior periods
Q3-15
Q2-16
Q3-16
Vacancy rate
20.4%
19.7%
20.3%
684,267
180,918
(552,143)
$20.14
$20.41
$20.37
113,127,081
113,251,081
113,251,081
Absorption (YTD) Rents Inventory
Class A Large Blocks of Space 20,000 SF+
50,000 SF+
100,000 SF+
200,000 SF+
300,000 SF+
O'Hare
12
7
3
0
0
Northwest
39
21
11
4
1
North
40
19
12
4
4
Lisle-Naperville
25
13
6
4
2
Oak Brook
23
9
3
1
0
Total
139
69
35
13
7
market to witness a decrease in vacancy, the Lisle-Naperville market reported the most significant change, rising in vacancy by 3.1 percent. Class A vacancy in the suburban office market rose to 20.2 percent, up from 18.7 percent in the previous quarter as larger tenants- including Redbox, Banco Popular and ConAgrareturned space to the market. The overall sublease vacancy rate also remained flat in the third quarter of 2016 at 1.3 percent.
Absorption The third quarter of 2016 ended with 552,143 square feet of negative year-to-date net absorption, compared to positive 180,918 square feet reported at the end of second quarter.
Class A assets were effected the most the third quarter of 2016 Leasing volume in the suburban office market decreased in the third with 905,412 square feet of negative net absorption, compared quarter of 2016, as vacancy rose to 20.3 percent from 19.7 percent in to positive 104,755 square feet at mid-year 2016. the second quarter. While the North market was the only suburban
Large Blocks of Availability There are currently 45 properties in the suburban office market that can accommodate large (100,000 square feet and above) users, with 35 of them being Class A. While there are few available large blocks of space in the O’Hare and Oak Brook markets, the Northwest market continues to offer the majority of large block options. AT&T Corporate Campus, a 1.6 million square foot asset in Hoffman Estates has been removed from our statistics as it is currently in receivership. Once the situation with this asset has been determined and it is recapitalized we will place it back into the inventory.
Net Absorption and Vacancy | Suburban Office Market Net Absorption & Vacancy Overall Suburban Office
21.8%
2,000,000
21.6%
21.6%
1,500,000
1,448,085
21.4% 21.2%
21.2%
1,000,000
21.0% 450,104
500,000
21.0% 20.8%
20.8% 396,142
20.6% 20.4%
20.3%
0
20.2%
(213,655)
(500,000)
20.0%
(246,242)
(1,000,000)
2011
2012
Source: Costar; Colliers International Research
2013
19.9%
2014
Absorption
2015
(552,143)
19.8% 19.6%
2016
Vacancy
Rents
The average gross asking rent for all classes in suburban Chicago decreased slightly to $20.37 per square foot gross compared to $20.41 at the end of the second quarter.
Construction While there hasn’t been any speculative construction delivered since 2010 and none is expected throughout 2016, build-to-suit activity is thriving within the suburban market. Most notably, Zurich North America’s 735,000-squarefoot headquarters at Meacham Road and Interstate 90 in Schaumburg was recently completed, while American Academy of Pediatrics is building a 193,000-square-foot development at Park Boulevard and Pierce Road in Itasca with completion expected in the fall of 2017. Chamberlain Group, a division of Duchossois Group, is building a 228,600-square-foot office development on the land it acquired from Follett Corporation on Windsor Drive in Oak Brook with completion expected in early 2017. In addition, McShane Development Company and MetLife Real Estate Investors recently announced Huntington 90, a build-to-suit business park in Hoffman Estates which can accommodate up to 500,000-square-foot facilities.
Submarket Vacancy Submarket Vacancy Rates Rates | 2014 - 2016 2014 - 2016
30.0% 25.0% 20.0%
22.1% 22.5% 22.3% 19.3%
18.0%
19.1%
22.5%
21.5% 18.0%
18.6%
21.8%
19.7%
19.9%
Lisle/Naperville
Oak Brook
18.7%
15.0% 10.0% 5.0% 0.0% -5.0%
O'Hare 2014
2015
Northwest
North
2016
Source: Costar; Colliers International Research
Asking Gross Rental Rates Asking Gross Rental Rates Overall Suburban Office $35.00 $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $0.00
2011
2012
2013
2014
Source: Costar; Colliers International Research
2
19.1%
Vacancy (%)
The average Class A gross asking rent ended the third quarter at $28.66 per square foot gross, compared to $28.60 in the second quarter of 2016.
Research & Forecast Report | Third Quarter 2016 | Suburban Chicago / Office | Colliers International
2015
2016
PLEASANT PRAIRIE
Tenants In The Market | Active Requirements
WISCONSIN ILLINOIS
HARVARD
NORTH
GURNEE WAUKEGAN
North 1,363,000 SF
MCHENRY
Northwest 1,511,000 SF 12
45 LIBERTYVILLE
WAUCONDA
83
MARENGO
LAKE FOREST
60
LAKE ZURICH
94
83 22
BARRINGTON
LAKE CO.
BUFFALO GROVE
COOK CO.
Lake Cook Rd.
KANE CO.
HUNTLEY
68
62
DEERFIELD
PALWAUKEE FIELD 21
12 ROLLING MEADOWS
14
72
HIGHLAND PARK
LINCOLNSHIRE
45
SLEEPY HOLLOW
Lake Michigan
NORTHBROOK
41
WINNETKA 94
ARLINGTON 53 HEIGHTS
59
GLENVIEW
90
COOK CO. DuPAGE CO.
20
41 190
ITASCA
290
KANE CO.
ADDISON
WEST CHICAGO
83
OAK PARK
CHICAGO
290
LOMBARD
BROADVIEW 43
90
34
McCOOK
294
LISLE
NAPERVILLE
CICERO
45
88
ay East-West Tollw
88
DOWNERS GROVE
HINSDALE
BEDFORD PARK
34
50
43 53
355
WILL CO.
94
MIDWAY AIRPORT
55
BURR RIDGE
KANE CO. KENDALL CO.
90
MELROSE PARK
OAKBROOK
AURORA
94
64
ELMHURST
59
DuPAGE CO.
East-West 1,953,000 SF
53 355
O’Hare 688,000 SF
FRANKLIN PARK
290
CAROL STREAM
64
90
ROSEMONT
O'HARE INTERNATIONAL AIRPORT
HANOVER PARK
ST. CHARLES
EVANSTON
COOK CO.
31
SKOKIE
58
ELK GROVE VILLAGE
O'Hare Expy. inElg
20
MOUNT PROSPECT
SCHAUMBURG
WILMETTE
294
DuPAGE CO.
HOFFMAN ESTATES
ELGIN
BATAVIA
10 miles
VERNON HILLS
McHENRY CO.
CARY
5
NORTH CHICAGO
GRAYSLAKE
CRYSTAL LAKE
0 1
94
90
55
12
20
WILL CO.
ROMEOVILLE
57
Despite the increase in vacancy in the Suburban Office Market, the velocity of small and mid-size tenants in the market is on the rise.
WILL CO.
ORLAND PARK 45
50
SOUTH HOLLAND 294
TINLEY PARK 80
JOLIET
CHICAGO MATTESON HEIGHTS PARK FOREST
NEW LENOX UNIVERSITY PARK
80
MONEE
GRUNDY CO. WILL CO.
ELWOOD
55
3
HAMMOND
ILLINOIS
7
MINOOKA
94
Research & Forecast Report | Third Quarter 2016 | Suburban Chicago / Office | Colliers International
LANSING
INDIANA
171
WILL CO.
53
KENDALL CO. GRUNDY CO.
GARY
ALSIP COOK CO.
COOK CO.
PLAINFIELD
COOK CO.
WILL CO.
KENDALL CO.
WOODRIDGE BOLINGBROOK
Significant Lease and Sale Activity Top Suburban Office Leasing Activity 3Q 2016 TENANT
BUILDING
TOWN
SUBMARKET
CLASS
SIZE (SF)
DEAL TYPE
Wilton
Washington Pointe
Naperville
LN
A
86,000
New
Abercrombie & Kent
Executive Towers West
Downers Grove
OB
A
45,500
New
Fresenius USA Manufacturing*
Carriage Point
Lake Bluff
N
B
45,250
New
Plante Moran
Woodfield Corporate Center
Schaumburg
NW
A
40,000
New
Land of Nod*
North Grove Corporate Park
Morton Grove
N
C
37,750
Renewal
Sagent Pharmaceuticals, Inc.*
Chatham Centre
Schaumburg
NW
A
34,000
Renewal/Expansion
Wistron Mobile Solutions Corporation*
953 American Lane
Schaumburg
NW
A
30,500
New
Robert Morris University*
ITECH @ Amerhurst
Waukegan
N
B
24,000
Renewal
Thomson Reuter*
1111 W 22nd Street
Oak Brook
OB
A
22,500
Renewal
Citadel Investments
Esplanade V
Downers Grove
OB
A
22,000
Renewal
Paychex North America*
27545 Diehl Road
Warrenville
LN
B
22,000
New
Rush Medical
Mid America Plaza
Oakbrook Terrace
OB
A
20,000
New
Dealer E-Process
Arboretum Lakes IV
Lisle
LN
A
18,500
New
Vision Solutions, Inc.*
Oakbrook Terrace Corp Ctr II
Oakbrook Terrace
OB
B
18,000
Renewal
Northwestern University*
Church Street Office Center
Evanston
N
A
18,000
Renewal
BDO Seidman
O'Hare Gateway
Rosemont
O
A
17,000
New
Genex*
Embassy Plaza
Schaumburg
NW
A
16,500
Renewal
Daugherty Systems, Inc.*
Oakbrook Terrace Tower
Oakbrook Terrace
OB
A
15,000
New
Sapa Extrusions, Inc.*
One O'Hare Centre
Rosemont
O
A
15,500
New
*Colliers International Transaction
Recent Suburban Office Investment Sales Activity 3Q 2016 STATUS
PROPERTY
TOWN
SUBMKT CLASS
SIZE (SF)
SALE PRICE
PRICE/SF
BUYER
SELLER
Sold
Woodfield Preserve
Schaumburg
NW
A
647,216
$73,500,000.00
113.33
Zeller Realty Group
KBS Real Estate Investment
Sold
Woodfield Corporate Center
Schaumburg
NW
A
532,972
$32,000,000.00
$61.38
Sperry Commercial
MassMutual Life Insurance
Sold
Commerce Plaza
Oak Brook
OB
A
515,005
$10,192,500.00
187.00
Equus Partners
The Blackstone Group
Sold
1 & 2 Mid America Plaza
Oakbrook Terrace
OB
A
409,260
$78,000,000.00
190.59
Equus Partners
Lincoln Property
Sold
Three Overlook Point
Lincolnshire
N
A
283,257
$60,150,000.00
212.35
Griffin Capital
Northwestern Mutual
Sold
3000 Lakeside Drive
Bannockburn
N
A
209,421
$29,250,000.00
139.67
Dougherty Real Estate Equity Advisors
C-III Asset Management
Sold
Woodlake Corporate Center
Lombard
OB
B
158,454
$28,300,000.00
107.73
Brennan Investment Group
UBS Realty Investors
Sold
Northwest Plaza
Rosemont
O
B
155,649
$8,600,000.00
$55.25
Wintrust Financial Corporation
Fulcrum Asset Advisors
Sold
Citibank Office Plaza
Oak Brook
OB
A
107,780
$17,489,500.00 $162.24
Franklin Partners
American Realty Advisors
Sold
Kensington Corp Ctr I
Mount Prospect
NW
A
87,453
Undisclosed
Nanta Buranakanchana
Younan Properties
Sold
1501 Mittel Boulevard
Wood Dale
NW
B
72,260
$14,000,000.00
193.74
Broadstone Real Estate, LLC
Lend Lease RE Investments
UC
Riverway
Rosemont
O
A
699,120
TBD
TBD
TBD
The Blackstone Group
UC
Olympian Office Centre
Lisle
LN
A
167,756
TBD
TBD
TBD
Riverview Realty Partners
UC
Church Street Office Center
Evanston
N
A
155,652
TBD
TBD
TBD
Farbman Group
UC
300 N Field Dr
Lake Forest
N
A
137,300
TBD
TBD
TBD
Pfizer
UC
Woodfield Green Executive Centre
Hoffman Estates
NW
B
109,392
TBD
TBD
TBD
JHO Mutual
UC
One Conway Park
Lake Forest
N
A
105,000
TBD
TBD
TBD
Fulcrum/Zell
LN=Lisle/Naperville
4
N=North
NW=Northwest
OB=Oak Brook Area
O=O’Hare
FS=For Sale
NEW=New to Market
UC=Under Contract
Research & Forecast Report | Third Quarter 2016 | Suburban Chicago / Office | Colliers International
Significant Lease and Sale Activity Recent Suburban Office Investment Sales Activity 3Q 2016 STATUS
PROPERTY
TOWN
SUBMKT CLASS
SIZE (SF)
SALE PRICE
PRICE/SF
BUYER
SELLER
New
Lucent Technologies
Naperville
LN
A
516,120
TBD
TBD
TBD
Nokia
New
Schaumburg Corporate Center
Schaumburg
NW
A
965,986
TBD
TBD
TBD
John Hancock
New
Balmoral Business Campus
Rosemont
O
A
233,845
TBD
TBD
TBD
TA Realty
New
The Pointe at Itasca
Itasca
NW
A
159,966
TBD
TBD
TBD
Northwestern Mutual
New
6300 N River Road
Rosemont
O
B
137,942
TBD
TBD
TBD
Village of Rosemont
New
155 N Pfingsten Road
Deerfield
N
A
117,036
TBD
TBD
TBD
Colony Realty Partners
LN=Lisle/Naperville
5
N=North
NW=Northwest
OB=Oak Brook Area
O=O’Hare
FS=For Sale
NEW=New to Market
UC=Under Contract
Research & Forecast Report | Third Quarter 2016 | Suburban Chicago / Office | Colliers International
O’Hare While the O’Hare market is traditionally Market Indicators Relative to prior periods Q3-15 known for attracting corporate users 18.6% Vacancy rate with its convenient highway access, 82,956 Absorption (YTD) public transportation and proximity $20.84 Rents to O’Hare International Airport, it 13,307,477 Inventory experienced an increase in vacancy for the second consecutive quarter as Vacant Space by Property Type Vacant Space By Property Type tenants such as Banco Popular reduced size in the market. Class C 274,430 SF 12.9% Vacant
Vacancy Overall vacancy in the O’Hare market rose to 19.1 percent, up from 18.2 in the second quarter of 2016. Class B properties remained relatively unchanged, rising to 26.2 percent from 26.1 percent in the second quarter of 2016. However, Class A properties witnessed an increase in vacancy, rising to 14.9 percent from 13.6 percent in the second quarter of 2016. Despite the increase in vacancy, O’Hare Class A vacancy is the lowest of all the suburban submarkets.
Overall net absorption in the O’Hare market totaled negative 146,951 square feet, compared to negative 36,863 square feet at the end of the second quarter. Class A assets were responsible for a majority of the negative absorption as larger tenants including Banco Popular gave back space in the market.
Q3-16
18.2%
19.1%
(36,863)
(146,951)
$21.19
$21.09
13,307,477
13,307,477
Class A 8,128,694 SF 14.9% Vacant
Class B 4,904,353 SF 27.5% Vacant
The O’Hare market offers the lowest amount of sublease space of all the suburban markets at 0.4 percent.
Absorption
Q2-16
Class A
Class B
Class C
Net Absorption & Vacancy
Net Absorption and Vacancy | O’Hare Office Market
O'Hare Submarket
25.0%
250,000 208,141
22.4%
200,000 150,000
21.4%
173,397
20.8%
131,897
19.3%
19.1%
18.0%
100,000
70,885
15.0%
50,000 0
Large Blocks of Availability Options for large space requirements continued to dwindle in the O’Hare market in the third quarter. There are currently only four properties that can accommodate large users of 100,000 square feet and above, three of which are Class A.
(50,000)
10.0% (43,073)
(100,000)
5.0%
(150,000) (200,000)
20.0%
(146,951) 2011
2012
Source: Costar; Colliers International Research
2013
Absorption
2014
Vacancy
2015
2016
0.0%
Rents
Asking Gross Rental Asking Gross Rental Rates Rates | O’Hare Office Market O'Hare Submarket
Class A average gross asking rent for the O’Hare market increased to $31.15 per square foot gross in the third quarter of 2016, compared to $31.03 in the second quarter of 2016.
$35.00 $30.00 $25.00 $20.00
The average gross asking rate for all classes deceased in the third quarter of 2016, dropping to $21.09 from $21.19 in the second quarter.
$15.00 $10.00
Construction
$5.00 $0.00
No new speculative construction was completed in the O’Hare market during the third quarter and none is expected for the remainder of 2016. However, construction continues on the Elgin O’Hare extension. The improved access to O’Hare will reduce travel times to the airport as well as promote economic development in the O’Hare and surrounding areas.
2011
2012
Source: Costar; Colliers International Research
2013
Class A
2014
2015
Class B
2016
Class C
Average
Top 10 Large Available Blocks by Square Feet 9600 W Bryn Mawr Avenue
Proposed projects include Pointe O’Hare II and O’Hare Corporate Campus, both in Rosemont. If completed, these projects could add 1.4 million square feet to the O’Hare market. In addition, Hosts Hotels & Resorts, Inc. is currently trying to obtain a zoning amendment to develop a 750,000-square-foot office building on the land next to its O’Hare Marriott property.
161,676
5450 N Cumberland Avenue
143,525
8750 W Higgins Road
117,212
1350 Touhy Avenue
98,357
2400 E Devon Avenue
72,975
999 E Touhy Avenue
59,710
9500 W Bryn Mawr Avenue
56,454
10255 W Higgins Road
CLASS A CLASS B
53,773
1700 W Higgins Road
53,645
8725 W Higgins Road
52,259
Significant Lease and Sale Activity Top O’Hare Office Leasing Activity 3Q 2016 TENANT
BUILDING
TOWN
CLASS
SIZE (SF)
DEAL TYPE
BDO Seidman
O'Hare Gateway
Rosemont
A
17,000
New
Sapa Extrusions, Inc.*
One O'Hare Centre
Rosemont
A
15,500
New
*Colliers International Transaction
Recent O’Hare Office Investment Sales Activity 3Q 2016 STATUS
PROPERTY
TOWN
CLASS
SIZE (SF)
SALE PRICE
PRICE/SF
BUYER
SELLER
$55.25
Wintrust Financial Corporation
Fulcrum Asset Advisors
TBD
TBD
TBD
The Blackstone Group
TBD
TBD
TBD
Village of Rosemont
Sold
Northwest Plaza
Rosemont
B
155,649
$8,600,000.00
UC
Riverway
Rosemont
A
699,120
New
6300 N River Rd
Rosemont
B
137,942
FS=For Sale
7
NEW=New to Market
UC=Under Contract
Research & Forecast Report | Third Quarter 2016 | Suburban Chicago / Office | Colliers International
Northwest After showing improvement in the first half of 2016, the Northwest market showed meager activity in the third quarter.
Market Indicators Relative to prior periods
Q3-15
Q2-16
Q3-16
Vacancy rate
22.6%
22.0%
22.3%
(165,424)
176,440
81,414
$18.17
$18.55
$18.66
30,565,814
30,565,814
30,565,814
Absorption (YTD) Rents
Vacancy
Inventory
The Northwest market retains the highest vacancy level of all the suburban markets, reporting 22.3 percent versus 22.0 percent in Space by Property Type Vacanct Vacant Space By Property Type the second quarter. While vacancy in Class B assets remained relatively flat, Class A properties witnessed the most substantial increase in vacancy, rising to 19.5 percent, compared to 18.9 percent in the second quarter 2016.
Class C 1,440,427 SF 12.9% Vacant
Sublease options in the Northwest market remain low at 0.9 percent, compared to 0.8 percent during the second quarter of 2016.
Class A 18,623,928 SF 19.5% Vacant
Class B 10,501,459 SF 28.6% Vacant
Absorption While quarterly net absorption in the Northwest market ended the third quarter at negative 98,887 square feet, year-to-date absorption remained positive at 81,414 square feet. The bulk of third quarter negative absorption came from larger tenants such as Motorola giving space back to the market.
Class A
Class B
Net Absorption & Vacancy Net Absorption and Northwest Submarket
Class C
Vacancy | Northwest Office Market
400,000
Large Blocks of Availability The Northwest market continues to offer the most options for large space requirements with 16 properties that can accommodate large (100,000 square feet and above) users, 11 of them being Class A. AT&T Corporate Campus, a 1.6 million square foot asset in Hoffman Estates has been removed from our statistics as it is currently in receivership. Once the situation with this asset has been determined and it is recapitalized we will place it back into the inventory.
25.0%
335,187 258,427
200,000
24.4%
24.5%
125,405
81,414
24.0%
24.0%
0
23.5% (200,000)
(149,543)
23.0%
22.9%
(400,000)
22.5%
22.5% 22.3%
(600,000)
22.1%
(620,162)
(800,000)
2011
2012
Source: Costar; Colliers International Research
2013
Absorption
2014
Vacancy
22.0%
2015
2016
21.5%
Rents
Asking Gross Rental Asking Gross Rental Rates
Rates | Northwest Office Market
Northwest Submarket
The Northwest suburban Class A average gross asking rate increased to $24.73 per square foot gross, compared to $24.52 in the second quarter of 2016.
$35.00 $30.00 $25.00
The average gross asking rate for all classes also improved, rising to $18.66 per square foot gross, compared to $18.55 the second quarter of 2016.
$20.00 $15.00 $10.00
Construction
$5.00
No new speculative construction was completed in the Northwest market during the second quarter and none is expected for the remainder of 2016. However, Zurich North America’s 735,000-square-foot headquarters at Meacham Road and Interstate 90 in Schaumburg was recently completed. Additionally, American Academy of Pediatrics is building a 193,000-square-foot build-to-suit development at Park Boulevard and Pierce Road in Itasca with completion expected in the fall of 2017. Finally, McShane Development Company and MetLife Real Estate Investors recently announced Huntington 90, a build-to-suit business park in Hoffman Estates which can accommodate up to 500,000 square foot facilities.
$0.00
2011
2012
Source: Costar; Colliers International Research
2013
2014
2015
Class B
Class A
Class C
2016
Average
Top 10 Large Available Blocks by Square Feet 572,509
1400 & 1450 American Lane 2 Pierce Place
308,232
2550 W Golf Road
216,592
1707 N Randall Road
202,463
1000 E Woodfield Road
184,481
21440 Lake Cook Road
145,020
5201 Tollview Road
126,284
700 N Wood Dale Road
125,323
777 Big Timber Road
CLASS A CLASS B
125,000
1500 W Shure Drive
107,161
Significant Lease and Sale Activity Top Northwest Office Leasing Activity 3Q 2016 TENANT
BUILDING
TOWN
CLASS
SIZE (SF)
DEAL TYPE
Plante Moran
Woodfield Corporate Center
Schaumburg
A
40,000
New
Sagent Pharmaceuticals, Inc.*
Chatham Centre
Schaumburg
A
34,000
Renewal/Expansion
Wistron Mobile Solutions Corporation*
953 American Lane
Schaumburg
A
30,500
New
Genex*
Embassy Plaza
Schaumburg
A
16,500
Renewal
*Colliers International Transaction
Recent Northwest Office Investment Sales Activity 3Q 2016 SALE PRICE
PRICE/SF
Sold
STATUS
Woodfield Preserve
PROPERTY
Schaumburg
A
647,216
73,500,000.00
$113.33
Zeller Realty Group
KBS Real Estate Investment
Sold
Woodfield Corporate Center
Schaumburg
A
532,972
32,000,000.00
$61.38
Sperry Commercial
MassMutual Life Insurance
Sold
Kensington Corp Ctr I
Mount Prospect
A
87,453
Undisclosed
Nanta Buranakanchana
Younan Properties
Sold
1501 Mittel Boulevard
Wood Dale
B
72,260
14,000,000.00
$193.74
Broadstone Real Estate, LLC
Lend Lease RE Investments
UC
Woodfield Green Executive Centre
Hoffman Estates
B
109,392
TBD
TBD
TBD
JHO Mutual
New
Schaumburg Corporate Center
Schaumburg
A
965,986
TBD
TBD
TBD
John Hancock
New
The Pointe at Itasca
Itasca
A
159,966
TBD
TBD
TBD
Northwestern Mutual
FS=For Sale
9
NEW=New to Market
TOWN
CLASS
SIZE (SF)
BUYER
SELLER
UC=Under Contract
Research & Forecast Report | Third Quarter 2016 | Suburban Chicago / Office | Colliers International
North After suffering from tenant downsizing and downtown migration earlier in the year, the North market continued to bounce back in the third quarter as tenants such as Donlen began to occupy space. Vacancy
Market Indicators Relative to prior periods
Q3-15
Q2-16
Q3-16
Vacancy rate
19.6%
18.9%
18.6%
Absorption (YTD)
548,811
(267,517)
(182,997)
Rents
$21.89
$22.05
$22.04
29,032,562
29,032,562
29,032,562
Inventory
Vacant Space byVacant PropertySpace Type
After a hiccup in the first quarter of 2016, the North market continued to rebound, ending the third quarter with 18.6 percent total vacancy, down from 18.9 percent in the second quarter. This is a vast improvement when considering the 19.2 percent vacancy that was reported in the first quarter.
Class C 1,147,720 SF 19.0% Vacant
Class A vacancy in the third quarter of 2016 was down to 21.1 percent, compared to 21.5 in the second quarter. When considering high quality, true Class A properties in the North market, vacancy is even lower at was 13.7 percent at the end of the third quarter, compared to 14.9 percent in the second quarter.
While year-to-date net absorption in the North market remained negative at 182,997 square feet due to tenants that moved out earlier in the year, the North was the only market able to achieve positive net absorption in the third quarter of 2016, ending with positive 84,520 square feet.
Class A 18,439,512 SF 21.1% Vacant
Class B 9,445,330 SF 13.7% Vacant
Sublease options in the Northwest market remain low at 0.7 percent, compared to 0.8 percent during the second quarter of 2016.
Absorption
By Property Type
Class A
Class B
Class C
Net Absorption & Vacancy Net Absorption and Vacancy | North Office Market North Submarket
1,500,000
25.0% 21.5%
1,000,000 19.3%
20.0%
18.6% 191,438
204,042
15.0%
401
(182,997)
(500,000)
Class A properties were responsible for the bulk of the positive net absorption, ending the quarter with 74,027 square feet.
18.6%
18.0%
17.9%
500,000 0
1,028,056
10.0%
5.0%
(1,000,000) (1,042,724)
(1,500,000)
2011
2012
Source: Costar; Colliers International Research
2013
Absorption
2014
Vacancy
2015
2016
0.0%
Large Blocks of Availability
Asking Gross Rental Asking Gross Rental Rates Rates | North Office Market North Submarket
There are 13 blocks of space available for large-sized tenants (100,000 square feet and above) in the North market, with 12 of them being Class A. However, when considering high quality, true Class A properties, options are limited.
$35.00 $30.00 $25.00 $20.00
Rents
$15.00 $10.00
Average Class A gross asking rent in the North market decreased slightly to $30.13, compared to $30.17 per square foot gross in the second quarter of 2016.
$5.00 $0.00
2011
2012
2013
The average gross asking rate for all classes remained relatively flat at $22.04 per square foot gross, compared to $22.05 in the second quarter of 2016.
Construction
2014
2015
Class B
Class A
Source: Costar; Colliers International Research
Class C
Top 10 Large Available Blocks by Square Feet
No new speculative construction was completed in the North market during the second quarter and none is expected for the remainder of 2016.
600 N US Highway 45
966,061
1000 Milwaukee Avenue
There are a few sites available for future build-to-suit projects in the North market, including Janko’s 170,000-squarefoot project in Lake Forest and Quadrangle Development’s 250,000-square-foot project in Deerfield.
405,039
3100 Sanders Road
365,268
2 Overlook Point
302,678
1615-1675 S Lakeside Drive
CLASS A CLASS B
207,512
300 Tower Parkway
175,545
26125 N Riverwoods Boulevard
159,821
300 N Field Drive
137,300
1 N Field Court
130,041
3600 W Lake Avenue
120,999
Significant Lease and Sale Activity Top North Office Leasing Activity 3Q 2016 TENANT
BUILDING
TOWN
CLASS
SIZE (SF)
DEAL TYPE
Fresenius USA Manufacturing*
Carriage Point
Lake Bluff
B
45,250
New
Land of Nod*
North Grove Corporate Park
Morton Grove
C
37,750
Renewal
Robert Morris University*
ITECH @ Amerhurst
Waukegan
B
24,000
Renewal
Northwestern University*
Church Street Office Center
Evanston
A
18,000
Renewal
*Colliers International Transaction
Recent North Office Investment Sales Activity 3Q 2016 STATUS
PROPERTY
TOWN
CLASS
SIZE (SF)
Sold
Three Overlook Point
Lincolnshire
A
283,257
Sold
3000 Lakeside Drive
Bannockburn
A
209,421
UC
Church Street Office Center
Evanston
A
155,652
UC
300 N Field Dr
Lake Forest
A
UC
One Conway Park
Lake Forest
New
155 N Pfingsten Road
Deerfield
FS=For Sale
11
2016
Average
NEW=New to Market
SALE PRICE
PRICE/SF
BUYER
SELLER
$212.35
Griffin Capital
Northwestern Mutual
$139.67
Dougherty Real Estate Equity Advisors
C-III Asset Management
TBD
TBD
TBD
Farbman Group
137,300
TBD
TBD
TBD
Pfizer
A
105,000
TBD
TBD
TBD
Fulcrum/Zell
A
117,036
TBD
TBD
TBD
Colony Realty Partners
$60,150,000.00 $29,250,000.00
UC=Under Contract
Research & Forecast Report | Third Quarter 2016 | Suburban Chicago / Office | Colliers International
Lisle-Naperville The Lisle-Naperville market suffered a setback as vacancy rises to a 10 year high.
Market Indicators Relative to prior periods
Q3-15
Q2-16
Q3-16
Vacancy rate
19.0%
19.4%
22.5%
(62,872)
44,426
(482,778)
$19.85
$20.40
$20.14
16,752,249
16,876,249
16,876,249
Absorption (YTD) Rents Inventory
Vacancy
Vacant Space by Property Type
The Lisle-Naperville market ended the third quarter of 2016 with 22.5 percent overall vacancy, up from 19.4 percent in the second quarter. Class A properties suffered the most as vacancy rose to 24.9 percent, up from 18.1 percent in the second quarter of 2016. This comes as no surprise as space from corporate users who have been out in the market has finally come to term.
Vacant Space By Property Type Class C 875,864 SF 9.3% Vacant
Class B 6,621,998 SF 21.0% Vacant
Sublease vacancy in the Lisle-Naperville market remains the highest of all the markets, ending the third quarter with 4.3 percent, up from 3.1 percent at the end of second quarter 2016.
Class A 9,378,387 SF 24.9% Vacant
Absorption The Lisle-Naperville market ended the third quarter of 2016 with 527,204 square feet of negative quarterly net absorption, compared to positive 20,872 square feet in the second quarter. This brings year-to-date net absorption in Lisle-Naperville to negative 482,778 square feet. The majority of the negative absorption in the Lisle-Naperville market occurred in Class A properties due to larger tenants such as ConAgra Foods and Unilever giving back space to the market.
Large Blocks of Availability Large blocks of availability are on the rise in the Lisle-Naperville market as it can accommodate eight large (100,000 square feet and above) users, six of them being Class A.
Class A
Class B
Class C
Net Absorption & Vacancy Net Absorption and Vacancy | Lisle-Naperville Office Market Lisle/Naperville Submarket 300,000
25.0%
228,284 22.5%
200,000 100,000
19.5%
82,531 45,63319.2%
19.1% 15,398
20.0%
19.7%
18.7%
0 15.0%
(100,000)
(72,169)
(200,000)
10.0%
(300,000) (400,000)
5.0%
(500,000) (600,000)
(482,778) 2011
2012
Source: Costar; Colliers International Research
2013
Absorption
2014
Vacancy
2015
2016
0.0%
Asking Gross Rental Asking Gross Rental Rates Rates | Lisle-Naperville Office Market Lisle/Naperville Submarket
Rents
$35.00 $30.00
Average Class A gross asking rent in the North market remained flat in the third quarter of 2016 at $27.88.
$25.00 $20.00
The average gross asking rate for all classes decreased to $20.14 per square foot gross, compared to $20.40 in the second quarter of 2016.
$15.00 $10.00 $5.00
Construction
$0.00
While no new speculative construction was completed in the Lisle-Naperville market during the second quarter of 2016, developers continue to seek locations for buildto-suit properties.
2011
2012
2013
2014
2015
Class B
Class A
Source: Costar; Colliers International Research
2016
Class C
Average
Top 10 Large Available Blocks by Square Feet *6200 S Route 53
360,000
263 Shuman Boulevard
354,000
2601 Navistar Drive
287,860
4201 Winfield Road
250,000
2400 Cabot Drive
205,633
215 W Diehl Road
162,000
2441 Warrenville Road
132,134
750 N Commons Boulevard
CLASS A CLASS B
112,605
4343 Commcerce Court
96,278
2200 Cabot Drive
*Sublease
87,364
Significant Lease and Sale Activity Top Lisle-Naperville Office Leasing Activity 3Q 2016 TENANT
BUILDING
TOWN
CLASS
SIZE (SF)
DEAL TYPE
Wilton
Washington Pointe
Naperville
A
86,000
New
Paychex North America*
27545 Diehl Road
Warrenville
B
22,000
New
Dealer E-Process
Arboretum Lakes IV
Lisle
A
18,500
New
*Colliers International Transaction
Recent Lisle-Naperville Office Investment Sales Activity 3Q 2016 STATUS
PROPERTY
TOWN
CLASS
SIZE (SF)
SALE PRICE
PRICE/SF
BUYER
SELLER
UC
Olympian Office Centre
Lisle
A
167,756
TBD
TBD
TBD
Riverview Realty Partners
New
Lucent Technologies
Naperville
A
516,120
TBD
TBD
TBD
Nokia
FS=For Sale
13
NEW=New to Market
UC=Under Contract
Research & Forecast Report | Third Quarter 2016 | Suburban Chicago / Office | Colliers International
Oak Brook The Oak Brook market lost some momentum after three consecutive years of declining vacancy.
Market Indicators Relative to prior periods
Q3-15
Q2-16
Q3-16
Vacancy rate
20.7%
18.8%
19.1%
280,796
264,432
179,169
$19.93
$19.84
$19.94
23,468,979
23,468,979
23,468,979
Absorption (YTD) Rents
Vacancy
Inventory
The Oak Brook market ended the third quarter of 2016 withVacant an Vacant Space by Property TypeType Space by Property Vacant Space By Property Type overall vacancy rate of 19.1 percent, up from 18.8 percent in the second quarter. While this is a setback for the market, it is still stronger than it was at the beginning of the year when overall Class vacancy was at 19.5 percent. ClassCC 1,085,111 999,111SF SF 18.4% 15.9%Vacant Vacant
While vacancy in Class A properties increased to 19.9 percent in the third quarter of 2016, up from 18.2 percent in the second quarter, Class B assets have witnessed a decrease in vacancy, dropping to 18.4 percent compared to 19.4 percent during the second quarter.
Class B B Class 8,961,842 SFSF 9,134,570 18.4% Vacant 21.3% Vacant
Sublease vacancy in the Oak Brook market is down, dropping to 1.0 percent, compared to 1.6 percent during the second quarter of 2016.
Absorption While third quarter net absorption in the Oak Brook market ended on a discouraging note at negative at 87,624 square feet, year-todate absorption remained positive at 179,169 square feet.
Class A A Class
Class Class BB
Net & Vacancy NetAbsorption Absorption and Oak Brook Submarket
Class Class CC
Vacancy | Oak Brook Office Market
600,000
Class A properties were responsible for a majority of the negative absorption in the third quarter as Redbox returned over 100,000 square feet of its headquarter space to the market.
500,000
Large Blocks Of Availability
100,000
The Oak Brook market offers limited options for large space requirements. Four properties in the Oak Brook market can accommodate large (100,000 square feet and above) users, 3 of them being Class A.
Class A 13,241,609 SF Class A 17.8% Vacant 13,508,026 SF 19.9% Vacant
23.5% 23.0%
468,344
22.9%
22.5%
400,000 300,000
220,895
21.9%
21.7%
22.0%
21.8% 247,383 179,169
200,000
21.0% 20.5%
0
20.0%
19.9%
(44,269)
(100,000)
19.5% 19.1%
(200,000) (300,000)
21.5%
(229,370) 2011
2012
Source: Costar; Colliers International Research
2013
Absorption
2014
Vacancy
2015
2016
19.0% 18.5%
Rents
Asking Gross Rental Asking Gross Rental Rates Rates | Oak Brook Office Market Oak Brook Submarket
Class A average gross asking rate in the Oak Brook market remained relatively flat at $29.42 per square foot gross, compared to $29.41 in the second quarter of 2016.
$35.00 $30.00 $25.00 $20.00
The average gross asking rate for all classes increased to $19.94 per square foot gross, compared to $19.84 in the second quarter of 2016.
$15.00 $10.00 $5.00
Construction
$0.00
No new construction was completed in the Oak Brook market during the second quarter of 2016. However, build-to-suit activity continues as Chamberlain Group, a division of Duchossois Group, is building a 228,600-square-foot office development on the land it acquired from Follett Corporation on Windsor Drive in Oak Brook with completion expected in early 2017.
2011
2012
2013
2014
2015
2016
Source: Costar; Colliers International Research
Top 10 Large Available Blocks by Square Feet 700 Oakmont Lane
256,767
2655 Warrenville Road
149,615
*2707 Butterfield Road
120,156
*3333 Finley Road
103,368
747 E 22nd Street
95,078
1 Tower Lane
89,896
4 Westbrook Corporate Center
82,728
3050 Highland Parkway
CLASS A CLASS B
74,319
1000 Royce Boulevard
68,000
2000 Spring Road
65,679
*Sublease
Significant Lease and Sale Activity Top Oak Brook Office Leasing Activity 3Q 2016 TENANT
BUILDING
TOWN
CLASS
SIZE (SF)
DEAL TYPE
Abercrombie & Kent
Executive Towers West
Downers Grove
A
45,500
New
Thomson Reuter*
1111 W 22nd Street
Oak Brook
A
22,500
Renewal
Citadel Investments
Esplanade V
Downers Grove
A
22,000
Renewal
Rush Medical
Mid America Plaza
Oakbrook Terrace
A
20,000
New
Vision Solutions, Inc.*
Oakbrook Terrace Corp Ctr II
Oakbrook Terrace
B
18,000
Renewal
Daugherty Systems, Inc.*
Oakbrook Terrace Tower
Oakbrook Terrace
A
15,000
New
*Colliers International Transaction
Recent Oak Brook Office Investment Sales Activity 3Q 2016 STATUS
PROPERTY
TOWN
CLASS
SIZE (SF)
SALE PRICE
PRICE/SF
BUYER
SELLER
Sold
Commerce Plaza
Oak Brook
A
515,005
$10,192,500.00
$187.00
Equus Partners
The Blackstone Group
Sold
1 & 2 Mid America Plaza
Oakbrook Terrace
A
409,260
$78,000,000.00
$190.59
Equus Partners
Lincoln Property
Sold
Woodlake Corporate Center
Lombard
B
158,454
$28,300,000.00
$107.73
Brennan Investment Group
UBS Realty Investors
Sold
Citibank Office Plaza
Oak Brook
A
107,780
$17,489,500.00
$162.24
Franklin Partners
American Realty Advisors
LN=Lisle/Naperville
15
N=North
NW=Northwest
OB=Oak Brook Area
O=O’Hare
FS=For Sale
NEW=New to Market
UC=Under Contract
Research & Forecast Report | Third Quarter 2016 | Suburban Chicago / Office | Colliers International
Third Quarter 2016 Office Market Statistics | Local Standards BLDGS
TOTAL INVENTORY SF
DIRECT VACANCY RATE
SUBLEASE VACANCY RATE
VACANCY VACANCY RATE QUARTERLY NET NET YTD RATE PRIOR CURRENT ABSORPTION –SF ABSORPTION –SF QTR QTR
Class A
37
8,128,694
14.4%
0.6%
14.9%
13.6%
(105,990)
(65,692)
0
0
$31.15
Class B
49
4,904,353
26.1%
0.1%
26.2%
26.1%
(4,098)
(79,047)
0
0
$18.94
Class C
8
274,430
12.9%
0.0%
12.9%
12.9%
-
(2,212)
0
0
$13.17
Subtotal
94
13,307,477
18.7%
0.4%
19.1%
18.2%
(110,088)
(146,951)
0
0
$21.09
Class A
87
18,623,928
18.4%
1.0%
19.5%
18.9%
(116,651)
160,279
0
0
$24.73
Class B
171
10,501,459
28.3%
0.3%
28.6%
28.5%
(8,549)
(72,573)
0
0
$17.19
Class C
28
1,440,427
10.7%
2.3%
12.9%
14.8%
26,313
(6,292)
0
0
$14.07
Subtotal
286
30,565,814
21.4%
0.9%
22.3%
22.0%
(98,887)
81,414
0
0
$18.66
Class A
111
18,439,512
20.1%
0.9%
21.1%
21.5%
74,027
(166,431)
0
0
$30.13
Class B
152
9,445,330
13.2%
0.5%
13.7%
13.9%
16,217
(13,092)
0
0
$18.56
Class C
29
1,147,720
19.0%
0.0%
19.0%
18.5%
(5,724)
(3,474)
0
0
$17.42
Subtotal
292
29,032,562
17.9%
0.7%
18.6%
18.9%
84,520
(182,997)
0
0
$22.04
CLASS
COMPLETIONS CURRENT QTR - SF
UNDER CONSTRUCTION - SF
RENTS
O’HARE
NORTHWEST
NORTH
LISLE/NAPERVILLE Class A
54
9,378,387
21.5%
3.4%
24.9%
18.1%
(639,451)
(637,087)
0
0
$27.88
Class B
122
6,621,998
14.9%
6.1%
21.0%
22.7%
117,649
155,836
0
0
$17.71
Class C
23
875,864
9.3%
0.0%
9.3%
8.7%
(5,402)
(1,527)
0
0
$14.83
Subtotal
199
16,876,249
18.3%
4.3%
22.5%
19.4%
(527,204)
(482,778)
0
0
$20.14
Class A
68
13,508,026
19.3%
0.6%
19.9%
18.2%
(222,102)
(196,481)
0
0
$29.42
Class B
142
8,961,842
16.5%
1.9%
18.4%
19.4%
94,238
337,575
0
0
$17.61
Class C
21
999,111
15.9%
0.0%
15.9%
19.9%
40,240
38,075
0
0
$12.78
Subtotal
231
23,468,979
18.1%
1.0%
19.1%
18.8%
(87,624)
179,169
0
0
$19.94
OAK BROOK
SUBURBAN TOTAL Class A
357
68,078,547
19.0%
1.2%
20.2%
18.7%
(1,010,167)
(905,412)
0
0
$28.66
Class B
636
40,434,982
19.7%
1.6%
21.3%
21.8%
215,457
328,699
0
0
$18.00
Class C
109
4,737,552
13.7%
0.7%
14.4%
15.5%
55,427
24,570
0
0
$14.45
Subtotal
1,102
113,251,081
19.0%
1.3%
20.3%
19.7%
(739,283)
(552,143)
0
0
$20.37
QUARTERLY COMPARISON AND TOTALS Q3-16
1,102
113,251,081
19.0%
1.3%
20.3%
19.7%
(739,283)
(552,143)
0
0
$20.37
Q2-16
1,102
113,251,081
18.4%
1.3%
19.7%
20.1%
469,698
180,918
0
0
$20.41
Q1-16
1,102
113,251,081
18.8%
1.4%
20.1%
19.9%
(288,780)
(288,780)
0
0
$20.36
Q4-15
1,102
113,251,081
18.7%
1.2%
19.9%
20.4%
763,818
1,448,085
124,000
0
$20.34
Q3-15
1,101
113,127,081
19.1%
1.4%
20.4%
21.0%
660,446
684,267
0
124,000
$20.14
*AT&T Corporate Campus, a 1.6 million square foot asset in Hoffman Estates has been removed from our statistics as it is currently in receivership. Once the situation with this asset has been dtermined and it is recapitalized we will place it back into the inventory.
16
Research & Forecast Report | Third Quarter 2016 | Suburban Chicago / Office | Colliers International
Third Quarter 2016 Office Market Statistics | Includes Owner Occupied Properties CLASS
BLDGS
TOTAL TOTAL TOTAL INVENTORY DIRECT SUBLEASE QUARTERLY NET NET YTD VACANCY RATE VACANCY RATE SF VACANCY RATE VACANCY RATE ABSORPTION –SF ABSORPTION –SF CURRENT QTR PRIOR QTR
COMPLETIONS CURRENT QTR - SF
UNDER CONSTRUCTION - SF
O’HARE Class A
40
8,512,703
13.4%
0.5%
14.0%
13.0%
(82,551)
(42,253)
0
0
Class B
62
5,488,880
28.8%
0.1%
28.9%
27.5%
(75,471)
(266,664)
0
0
Class C
17
721,942
6.3%
0.0%
6.3%
6.2%
(150)
1,120
0
0
Subtotal
119
14,723,525
18.8%
0.3%
19.2%
18.1%
(158,172)
(307,797)
0
0
Class A
103
22,752,977
22.4%
0.9%
23.3%
17.8%
(608,474)
(353,404)
783,800
0
Class B
322
16,812,420
22.4%
0.3%
22.7%
21.0%
(286,900)
(206,670)
0
0
Class C
65
2,389,554
13.2%
1.4%
14.5%
14.7%
3,123
(36,250)
0
0
Subtotal
489
41,954,951
21.9%
0.7%
22.6%
18.9%
(892,251)
(596,324)
783,800
0
Class A
142
24,376,911
18.3%
0.7%
19.0%
18.7%
(53,866)
(292,124)
0
0
Class B
283
21,650,613
10.4%
0.3%
10.7%
11.0%
56,804
(643,166)
0
0
Class C
63
2,196,276
12.7%
0.2%
12.9%
12.5%
(8,231)
(6,164)
0
0
Subtotal
488
48,223,800
14.5%
0.5%
15.0%
15.0%
(5,293)
(941,454)
0
0
NORTHWEST
NORTH
LISLE/NAPERVILLE Class A
64
12,089,711
18.8%
2.6%
21.4%
19.1%
(288,447)
(278,483)
0
0
Class B
205
10,948,818
13.2%
3.7%
16.9%
18.4%
222,238
(72,134)
75,000
0
Class C
50
1,608,387
11.1%
0.0%
11.1%
10.6%
(6,897)
(3,386)
0
0
Subtotal
319
24,646,916
15.8%
2.9%
18.7%
18.2%
(73,106)
(354,003)
75,000
0
Class A
72
14,148,966
18.4%
0.5%
19.0%
17.6%
(162,230)
(153,142)
32,000
0
Class B
220
12,704,017
13.3%
1.3%
14.7%
15.4%
95,123
338,133
0
0
Class C
48
1,865,887
10.9%
0.0%
10.9%
13.3%
43,610
28,877
0
0
Subtotal
340
28,718,870
15.7%
0.9%
16.5%
16.4%
(23,497)
213,868
32,000
0
OAK BROOK
SUBURBAN TOTAL Class A
421
81,881,268
19.0%
1.0%
20.0%
17.7%
1,195,568)
(1,119,406)
815,800
0
Class B
1,092
67,604,748
15.9%
1.0%
17.0%
15.9%
11,794
(850,501)
75,000
0
Class C
243
8,782,046
11.6%
0.4%
12.1%
12.4%
31,455
(15,803)
0
0
Subtotal
1,756
158,268,062
17.3%
1.0%
18.2%
17.1%
1,152,319)
(1,985,710)
890,800
0
QUARTERLY COMPARISON AND TOTALS Q3-16
1,756
158,268,062
17.3%
1.0%
18.2%
17.1%
(1,152,319)
(1,985,710)
890,800
0
Q2-16
1,753
157,377,262
16.1%
1.0%
17.1%
16.7%
(540,076)
(833,391)
0
890,800
Q1-16
1,753
157,377,262
15.7%
1.0%
16.7%
16.5%
(293,315)
(293,315)
0
890,800
Q4-15
1,753
157,377,262
15.6%
0.9%
16.5%
16.7%
435,259
446,097
124,000
890,800
Q3-15
1,752
157,253,262
15.7%
1.0%
16.7%
16.9%
216,602
121,442
22,000
982,800
17
Research & Forecast Report | Third Quarter 2016 | Suburban Chicago / Office | Colliers International
2016 INVESTMENT SALE ACTIVITY | SUBURBAN CHICAGO STATUS PROPERTY
TOWN
SUBMARKET CLASS
SIZE (SF) SALE PRICE
BUYER
SELLER
QUARTER
Medline Industries
W.P. Carey
1Q2016
Zeller Realty Group
KBS Real Estate Investment
3Q2016
Sperry Commercial
MassMutual Life Insurance
3Q2016
Equus Partners
The Blackstone Group
3Q2016
$163.34
Fulcrum Asset Advisors
John Buck Company
2Q2016
$166.74
Oak Street Real Estate Capital
Motorola Solutions
2Q2016
Equus Partners
Lincoln Property
3Q2016
Imperial Realty Company
Lionstone Investments
2Q2016
Griffin Capital
Northwestern Mutual
3Q2016
$28.87
Marc Realty
John Buck Company
1Q2016
$44.27
Patriot Equities LP
Aramark
2Q2016
Dougherty Real Estate Equity Advisors
C-III Asset Management
3Q2016
$28.95
Vinayaka Holdings Corporation
Westport Capital Partners
1Q2016
$89.06
SVN Equities. LLC
EverWest Real Estate Partners
2Q2016
American Landmark Properties
TA Realty
2Q2016
Brennan Investment Group
UBS Realty Investors
3Q2016
Wintrust Financial Corporation
Fulcrum Asset Advisors
3Q2016
Steelbridge Capital
Sabal Financial Group
2Q2016
$26.90
AMERCO Real Estate Co
The Blackstone Group
2Q2016
$9,850,000.00
$92.19
Farbman Group
EverWest Real Estate Partners
1Q2016
126,088
$5,309,000.00
$42.11
Bradford Allen Realty Services
J. Emil Anderson & Son, Inc.
2Q2016
A
107,780
$17,489,500.00
Franklin Partners
American Realty Advisors
3Q2016
NW
A
94,916
$4,296,847.32
$45.27
Hamilton Partners
Principal Real Estate Investors, LLC
1Q2016
Summit Oaks
Oakbrook Terrace OB
B
91,844
$5,015,000.00
$54.60
Forefront Properties, LLC
WH&H Realty Advisors/Blue Vista
2Q2016
Corporetum III
Lisle
A
91,722
$6,000,000.00
$65.42
American Landmark Properties
Prudential Life Insurance
1Q2016
Sold
3 Lakes Drive
Northfield
N
B
679,000
$44,700,000.00
Sold
Woodfield Preserve
Schaumburg
NW
A
647,216
$73,500,000.00
Sold
Woodfield Corporate Center
Schaumburg
NW
A
532,972
$32,000,000.00
Sold
Commerce Plaza
Oak Brook
OB
A
515,005
$10,192,500.00
Sold
3, 6, 9 Parkway North
Deerfield
N
A
484,328
$78,500,000.00
Sold
Motorola Solutions Tech Center
Schaumburg
NW
C
479,800
$80,000,000.00
Sold
1 & 2 Mid America Plaza
Oakbrook Terrace OB
A
409,260
$78,000,000.00
Sold
Concourse Office Plaza
Skokie
N
A
294,073
$30,500,000.00
Sold
Three Overlook Point
Lincolnshire
N
A
283,257
$60,150,000.00
Sold
Meadows Corporate Center
Rolling Meadows
NW
A
270,200
$7,800,000.00
Sold
2300 & 2500 Warrenville Road
Downers Grove
OB
B
248,475
$11,000,000.00
Sold
3000 Lakeside Drive
Bannockburn
N
A
209,628
$25,250,000.00
Sold
One Woodfield Lake Schaumburg
NW
B
204,345
$5,915,000.00
Sold
Washington Commons
Naperville
LN
B
202,101
$18,000,000.00
Sold
Oakbrook Place
Oak Brook
OB
B
179,400
$24,000,000.00
Sold
Woodlake Corporate Center
Lombard
OB
B
158,454
$28,300,000.00
Sold
Northwest Plaza
Rosemont
O
B
155,649
$8,600,000.00
Sold
500 Davis Street
Evanston
N
A
126,788
$18,000,000.00
Sold
5201 Tollview Drive Rolling Meadows
NW
B
126,284
$3,397,500.00
Sold
Boulevard 40
Northbrook
N
A
106,850
Sold
Touhy Office Plaza at O'Hare
Des Plaines
O
B
Sold
Citibank Office Plaza
Oak Brook
OB
Sold
1200 Arlington Heights Road
Itasca
Sold
Sold
LN=Lisle/Naperville
18
PRICE/ SF
N=North
NW=Northwest
LN
OB=Oak Brook Area
O=O’Hare
FS=For Sale
$65.83 $113.33 $61.38 $187.00
$190.59 $103.72 $212.35
$134.12
$133.78
$107.73 $55.25
$142.00
$162.24
NEW=New to Market
UC=Under Contract
Research & Forecast Report | Third Quarter 2016 | Suburban Chicago / Office | Colliers International
2016 INVESTMENT SALE ACTIVITY | SUBURBAN CHICAGO STATUS PROPERTY
TOWN
SUBMARKET CLASS
SIZE (SF) SALE PRICE
PRICE/ SF
BUYER
SELLER
QUARTER
Nanta Buranakanchana
Younan Properties
3Q2016
Sold
Kensington Corp Ctr I
Mount Prospect
NW
A
87,453
Undisclosed
Sold
Midwest Office Center
Oakbrook Terrace OB
B
77,039
$4,305,000.00
$55.88
Viking Partners Oakbrook, LLC
The Blackstone Group
2Q2016
Sold
415 Executive Center
Waukegan
N
B
73,418
$2,150,000.00
$29.28
Ascendance Partners, LLC
First City Financial Corp.
2Q2016
Sold
1501 Mittel Boulevard
Wood Dale
NW
B
72,260
$14,000,000.00
$193.74
Broadstone Real Estate, LLC
Lend Lease RE Investments
3Q2016
Sold
Butterfield Ridge Office Centre
Downers Grove
OB
B
71,552
$3,045,000.00
$42.56
Azim Hemani
LNR Partners, LLC
2Q2016
Sold
Kensington Business Center
Mount Prospect
NW
B
71,310
$2,250,000.00
$31.55
Nicholas & Associates
HSBC Card Services
1Q2016
Sold
Terrace Oaks
Oakbrook Terrace OB
B
55,829
$5,100,000.00
$91.35
Undisclosed
Terrace Oaks Associates
2Q2016
Sold
Park Ridge Office Center
Park Ridge
O
B
55,772
$2,400,000.00
$43.03
Imperial Realty Company
William Napleton
1Q2016
Sold
Basswood Executive Plaza
Schaumburg
NW
B
54,641
$1,257,000.00
$23.00
The Capital Companies, LLC
Exeter Property Group
1Q2016
Sold
Executive Office Center
Burr Ridge
OB
B
50,000
$2,550,000.00
$51.00
Anthony Cairo
Jack Napoleon
1Q2016
UC
Riverway
Rosemont
O
A
699,120
TBD
TBD
TBD
The Blackstone Group
Marketing
UC
Olympian Office Centre
Lisle
LN
A
167,756
TBD
TBD
TBD
Riverview Realty Partners
Marketing
UC
Church Street Office Center
Evanston
N
A
155,652
TBD
TBD
TBD
Farbman Group
Marketing
UC
300 N Field Drive
Lake Forest
N
A
137,300
TBD
TBD
TBD
Pfizer
Marketing
UC
Woodfield Green Executive Centre
Hoffman Estates
NW
B
109,392
TBD
TBD
TBD
JHO Mutual
Marketing
UC
One Conway Park
Lake Forest
N
A
105,000
TBD
TBD
TBD
Fulcrum/Zell
Marketing
New
Schaumburg Corporate Center
Schaumburg
NW
A
965,986
TBD
TBD
TBD
John Hancock
Marketing
New
Lucent Technologies
Naperville
LN
A
516,120
TBD
TBD
TBD
Nokia
Marketing
New
Balmoral Business Campus
Rosemont
O
A
233,845
TBD
TBD
TBD
TA Realty
Marketing
New
The Pointe at Itasca Itasca
NW
A
159,966
TBD
TBD
TBD
Northwestern Mutual
Marketing
New
6300 N River Road
O
B
137,942
TBD
TBD
TBD
Sierra US
Marketing
New
155 N Pfingsten Road
Deerfield
N
A
117,036
TBD
TBD
TBD
Colony Realty Partners
Marketing
FS
Central Park of Lisle
Lisle
LN
A
622,287
TBD
TBD
TBD
The Blackstone Group
Marketing
FS
One Pierce Place
Itasca
NW
A
578,737
TBD
TBD
TBD
Hamilton Partners
Marketing
FS
500 Park Boulevard Itasca
NW
A
450,614
TBD
TBD
TBD
Hamilton Partners
Marketing
FS
Parkview Plaza
Oakbrook Terrace OB
A
264,162
TBD
TBD
TBD
TIAA-CREF
Marketing
FS
1200 Lakeside Drive
Marketing
FS
Rosemont
N
A
260,084
TBd
TBD
TBD
Equity Commonwealth
One Parkway North Deerfield
N
A
256,743
TBD
TBD
TBD
The Blackstone Group
Marketing
FS
One Medline Place
Mundelein
N
A
252,826
TBD
TBD
TBD
Medline Industries
Marketing
FS
O'Hare Corporate Towers
Rosemont
O
B
202,325
TBD
TBD
TBD
Lincoln Property
Marketing
FS
Corporetum VI
Lisle
LN
A
172,695
TBD
TBD
TBD
Winthrop Realty Trust
Marketing
LN=Lisle/Naperville
19
N=North
Bannockburn
NW=Northwest
OB=Oak Brook Area
O=O’Hare
FS=For Sale
NEW=New to Market
UC=Under Contract
Research & Forecast Report | Third Quarter 2016 | Suburban Chicago / Office | Colliers International
2016 INVESTMENT SALE ACTIVITY | SUBURBAN CHICAGO STATUS PROPERTY
TOWN
SUBMARKET CLASS
SIZE (SF) SALE PRICE
PRICE/ SF
BUYER
SELLER
QUARTER
FS
Estancia Corporate Centre
Burr Ridge
OB
A
167,401
TBD
TBD
TBD
BJF Estancia, LLC
Marketing
FS
Woodlake Corporate Center
Lombard
OB
B
158,454
TBD
TBD
TBD
UBS Realty Investors
Marketing
FS
Lisle Executive Center
Lisle
LN
B
150,036
TBD
TBD
TBD
Boxer Property
Marketing
FS
600 N Field Drive
Lake Forest
N
A
137,498
TBD
TBD
TBD
James Campbell Company
Marketing
FS
1 N Field Drive
Lake Forest
N
A
130,401
TBD
TBD
TBD
Brunswick Corporation
Marketing
FS
777 Big Timber Road
Elgin
NW
A
127,280
TBD
TBD
TBD
InterCoastal Group
Marketing
FS
2245 Sequoia Drive
Aurora
LN
A
116,545
TBD
TBD
TBD
Zeller Realty Group
Marketing
FS
Golf Corporate Centre
Arlington Heights NW
B
93,000
TBD
TBD
TBD
Chicagoland Commercial
Marketing
FS
1200 Shermer Road
Skokie
N
A
80,811
TBD
TBD
TBD
Intercontinental Real Estate
Marketing
FS
Fox River Corporate Center
North Aurora
LN
B
77,006
TBD
TBD
TBD
Starwood Properties Trust
Marketing
FS
Commerce Center at O'Hare
Des Plaines
O
B
69,500
TBD
TBD
TBD
Pritchett Realty Corporation
Marketing
FS
Eden's Gateway
Skokie
N
B
65,368
TBD
TBD
TBD
The Alter Group
Marketing
FS
Meridian Lakes Plaza
Aurora
LN
B
64,258
TBD
TBD
TBD
ACG Management Co
Marketing
FS
Finley Business Center
Lombard
OB
B
63,196
TBD
TBD
TBD
Pritchett Realty Corporation
Marketing
LN=Lisle/Naperville
20
N=North
NW=Northwest
OB=Oak Brook Area
O=O’Hare
FS=For Sale
NEW=New to Market
UC=Under Contract
Research & Forecast Report | Third Quarter 2016 | Suburban Chicago / Office | Colliers International
502 offices in 67 countries on 6 continents
MARKET CONTACT: Ronna Larsen Research Manager, Suburban Office | Chicago +1 847 698 8517
[email protected]
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$2.3
billion in annual revenue
1.7
billion square feet under management
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professionals and staff
About Colliers International Colliers International Group Inc. (NASDAQ: CIGI; TSX: CIG) is a global leader in commercial real estate services with more than 16,300 professionals operating from 502 offices in 67 countries. With an enterprising culture and significant insider ownership, Colliers professionals provide a full range of services to real estate occupiers, owners and investors worldwide. Services include brokerage, global corporate solutions, investment sales and capital markets, project management and workplace solutions, property and asset management, consulting, valuation and appraisal services, and customized research and thought leadership. Colliers International has been ranked among the top 100 outsourcing firms by the International Association of Outsourcing Professionals’ Global Outsourcing for 10 consecutive years, more than any other real estate services firm. colliers.com
Copyright © 2016 Colliers International The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.