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Panelists: Chicago Is 'Tale of Two Cities'

CHICAGO-Panelists discussed the outlook for class A office building owners compared to owners of class B buildings.

By Gina Kenny | Updated on June 05, 2007

CHICAGO-More than 350 real estate professionals attended the fifth annual RealShare Chicago on Tuesday at the Fairmont Chicago. A recurring theme during the event was how the outlook differed depending on the type of office building.

“From the perspective of the owner of class A properties downtown, I would say the sun is shining on our pack. It is probably the best market since the late 80′s,” said Tom D’Arcy, vice president of Hines during the event’s Town Hall Meeting. While for class A properties “We have excellent organic growth. I am not sure that I have that same perspective for class B buildings in the West or Central Loop,” D’Arcy said. “It really depends on what you own.”

The same disparity holds true in the suburbs of Chicago, according to Kevin Clifton, partner with Colliers, Bennett & Kahnweiler. “In the suburbs, there is really a tale of two cities,” Clifton said. For class A buildings and class B buildings “the dynamics are very different.” Class A properties have “very low vacancies and some real rental rate increases over the last 12 to 24 months” as opposed to class B buildings where the rental rates have been “flat,” Clifton said.

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