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Trizec Sees Increased Vacancy in Local Holdings

CHICAGO-With more than 520,000 sf worth of leases expiring over the next two years, including 156,000 sf in the first quarter, Trizec Properties Inc. expects occupancy in its four-building, 2.4-million-sf to drop seven percentage points this year from 94%.

By Mark Ruda | Updated on February 15, 2005

CHICAGO-With new construction adding inventory to an already soft Downtown office market, Trizec Properties Inc. does not expect its 94% occupancy rate here to hold up. Instead, it is expected to drop seven percentage points during 2005, according to chief operating officer Bill Tresham.

Tresham said during the company’s recent earnings conference call the REIT faces a high amount of lease expirations in two of its four Downtown buildings–120 S. Riverside and 550 W. Washington. Occupancy at the 685,000-sf 120 S. Riverside is 98.7%, best in a local 2.4-million-sf portfolio where vacancy started the year at just 6%.

Trizec Properties has 254,000 sf worth of leases expiring in 2005, at rates that average $28.09 per sf, with another 269,000 sf rolling over in 2006. That represents 21.5% of the local portfolio. The expirations have begun in earnest, as 156,000 sf of leases are rolling over in the first quarter.

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