There was a negative net absorption of 152,140 sf from July through September, compared with a positive absorption of 452,630 feet during third quarter 2000. Year-to-date, there has been a negative absorption of 196,644 sf, compared with a positive absorption of 3.5 million sf during third quarter 2000.
Jack Durburg, a managing director at CBRE, describes a lease the firm brokered that may be the largest such deal signed this year in Chicago's suburban market. Washington Mutual Bank leased 172,785 sf at the Highland Landmark complex in nearby Downers Grove. The space will accommodate an expansion of Washington Mutual's loan-servicing operations when the space is ready for occupancy in January 2002.
Eleven new speculative office buildings opened in suburban Chicago during Q3, totaling 1.37 million sf with a combined pre-leased level of 18.3%, according to the report. Year-to-date, about 2.8 million sf of new office space was added to the market, compared with 3.2 million sf during the first nine months of 2000.
In terms of suburban Chicago's submarkets, CBRE indicates absorption levels year-to-date in the west suburban I-88 corridor of 76,770 sf; and in north suburban Cook and Lake counties, 72,570 sf. Net absorption levels are negative in the O'Hare submarket with 284,590 sf; and in the northwest suburbs with 114,100 sf.
Vacancy rates at the end of third-quarter 2001 were: north Cook/Lake counties, 10.4%; northwest suburbs, 12.6%; I-88 corridor, 14.1%; and O'Hare, 14.8%.
According to Durburg, rental rates are starting to decline. "Asking rents are declining by as much as 10%, and owners are becoming very aggressive in their lease proposals."
Many of the brokerage firms research and release their own market surveys with some variation in statistics and descriptions of the various submarkets. However, they do concur on the reality of the economic slowdown. Susan Rosen, a senior director in Cushman & Wakefield's office brokerage services group, states that "Owners are seeking creative ways in which to negotiate terms, offering rent abatement, reimbursement for the costs associated with moving and higher tenant improvement allowances."
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