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Foot Traffic Increases in Suburbs

CHICAGO-While transactions still were fewer than normal, foot traffic was up in Chicago's suburban office market, according to Jones Lang LaSalle's Q3 report.

By Cari Brokamp | Updated on October 14, 2009

CHICAGO-Though the amount of transactions was still lower than normal, foot traffic and activity appear to be on the upswing, encouraging brokers in Chicago’s suburban office market. According to Jones Lang LaSalle’s Q3 suburban office market report, direct vacancy was at 20.8% in Q3. Sublease space plays a significant role in suburban vacancy, adding another 3.5 million square feet and bringing total vacancy to 24.5%, however analysts say the rate at which sublease space is hitting the market has slowed.

“What we’re seeing in the third quarter is a decrease in additional sublease space being added to the market, which speaks to the bottoming out of cost-cutting and disposition from a tenants standpoint,” Sean Reynolds, EVP with Jones Lang LaSalle, tells GlobeSt.com. “We’re still seeing larger chunks of quality corporate space coming on, but we don’t see any major increase in additional sublease in the next quarter or two.” Reynolds says this change will have a significant impact on the market’s overall supply.

“From a demand side, we’re seeing tenants, that may have had a project on hold for three or four quarters, really bringing those projects back to the surface and look forward to taking advantage of the still very favorable tenants’ market,” Reynolds says. “People are seeing that the window of opportunity is transitioning away from an extremely favorable tenant market. Between now and 18 to 24 months out, a lot of projects are getting restarted.”

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