"People are asking themselves how the attacks will affect everything, but it's too soon to tell," Ron Garvey, VP at Transwestern, tells GlobeSt.com. "We don't know yet how it will affect the whole country, much less part of the real estate market. But if there's a long-term, fundamental shift in the way people do business--and in the role of business travel--that will have a profound effect on the market."
But, like most other markets in town, the office subleasing vacancy rate has seen a steady growth as companies downsize or merge. At the end of 2Q, 4.3% of the O'Hare market was up for sublet, in addition to the direct vacancies.
As for the industrial market, it's less clear that airline troubles will have an impact. Air cargo and distribution, a major focus of the O'Hare sector, seem more dependent on the overall economy (admittedly on the edge of a recession) than the health of air carriers. Carriers such as UPS and FedEx won't be affected if the traveling public is afraid to fly.
Indications for O'Hare industrial at the end of the summer were mixed. According to CB Richard Ellis figures, the industrial vacancy rate for the submarket--the largest of Chicago submarkets, with more than 100 million sf--stood at 8.4% as of midyear, or slightly below the Chicago market's overall average of 8.6%. O'Hare was faring considerable better than smaller markets, such as North DuPage County and Lake County, which have 15.4% and 12.3% industrial vacancy rates, respectively.
On the other hand, Grubb & Ellis numbers noted a significant negative industrial absorption--2.2 million sf for the first two quarters of the year. Even before the September attacks, the economy was cooling, particularly the manufacturing sector, which has been shedding jobs in the metro area lately. According to the US Department of Labor, about 12,000 manufacturing jobs were lost in the Chicago area from February to July 2001.
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