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Low Returns Don't Deter Local Office Buyers

CHICAGO-NCREIF pegs total return for Chicago office properties at 7.3%, less than half the national average, Delta Associates reports. Nonetheless, sales volume through September stood at $2.8 billion.

By Mark Ruda | Updated on December 04, 2005

(To read more on the debt and equity markets, click here.)

CHICAGO-Office building sales volume has only increased, and prices have become richer, even though total returns in the local market are less than half the national average, according to a recent report. Transwestern Commercial Services’ Delta Associates research arm notes the National Council of Real Estate Investment Fiduciaries (NCREIF) pegged total return for Chicago office properties at 7.3%, lowest among 12 selected areas.

Capitalization rates for Chicago office properties are about 7.8% through the first nine months of 2005, according to Delta Associates. Meanwhile, sales volume through September stood at $2.8 billion, on track to finish below the nearly $4 billion in deals done in 2004.

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