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Local Experts Say Retail Down but Not Out

CHICAGO-The commercial real estate market has been hit hard by the credit crunch and economic downturn, but experts say there is no need to panic.

By Gina Kenny | Updated on June 15, 2008

CHICAGO-Few would argue that the retail market has been hit particularly hard by the credit crisis and economic downturn. Yet, local market experts say there is no need to panic, and that retail is a pretty dynamic market that can adapt to the harsher conditions.

Vacancy rates in the Chicagoland area have increased slightly from 7.89% at the end of last year to 7.93% at the end of the first quarter of 2008, according to a market report from CB Richard Ellis. Comparing to a year ago, the increase was nearly a half percent from 7.52%. Although vacancy rates are up, they are “still very much in check” and are still below 10%, says Todd Caruso, CB Richard Ellis retail managing director for the Eastern US.

Lease rates have slightly increased. The average asking gross lease rates increased from $23.39 at the end of last year and $22.93 a year ago, to $23.44 for the first quarter of 2008, according to the report. Both vacancy rates and lease rates are expected to continue to inch up.

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