Search
 

Cooling Trend Expected in Red-Hot Downtown Office Market

CHICAGO-The Downtown office rental market opens 2001 at an all-time low 8.2% vacancy rate. A report by CB Richard Ellis, Inc. says the hottest areas are River North and the West Loop.

By Mark Ruda | Updated on January 03, 2001

CHICAGO-The West Loop and River North areas enter 2001 as the tightest office rental markets here, where vacancy rates have hit an all-time low despite troubles faced by the dot-com companies that made the market hum in early 2000. The office vacancy rate downtown shrunk to 8.2% at the end of the 2000, according to CB Richard Ellis, Inc., down from 9.3% at the dawn of Y2K.

But the pendulum may be swinging back toward the tenant, even though most new construction is being pre-leased. “I’m seeing people pulling back left and right, getting very conservative and trying to minimize the time on their lease,” said Jeff Liljeberg, senior vice president for CB Richard Ellis.

In 2000, downtown demand was greatest for Class A properties, which had a vacancy rate of just 5.6%, and properties in River North, where the vacancy rate in the area just north of the Loop was a tight 6.6%. The West Loop was just as hot, with a vacancy rate of 6.7%, according to the CB Richard Ellis study. Examples of just how tight the market is in those areas were Dearborn Plaza at 20 W. Kinzie in River North and 550 W. Washington Blvd. Just west of the Loop. Those buildings opened 98% leased, according to CB Richard Ellis. Both properties are close to public transportation, high on the wish list of companies aiming to attract and keep employees.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.