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Tenants' Market Predicted Through 2004

CHICAGO-The window is open for another 18 months for office tenants looking to capitalize on the soft market, according to Transwestern Commercial Services' appraisal and consulting affiliate Delta Associates.

By Mark Ruda | Updated on July 22, 2003

CHICAGO-Tenants have another 18 months to take advantage of the current “tenants’ market,” while corporate real estate owners might want to think about sale-leasebacks. Those are among the recommendations offered by Transwestern Commercial Services’ appraisal and consulting affiliate Delta Associates’ mid-year market report

Institutional investors seeking to buy well-leased class-A buildings in the stronger submarkets are pursuing a wise strategy, Delta Associates concludes. Capitalization rates on 2002 office building sales dropped below 8% in 2002 and are expected to remain there this year, according to Delta Associates.

Direct vacancy Downtown began July at 12.7%, according to Delta Associates, while the overall vacancy rate rose nearly a quarter-point to 15.0%. Meanwhile, overall vacancy in the suburbs dipped more than a quarter-point to 17.8%. However, that ranges from a relatively healthy 14.3% in the north suburbs to 24.3% in the O’Hare submarket, according to the report.

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