Suburban Office Market Continues its Sluggish Course

CHICAGO—It’s not easy to find the bright spots in suburban Chicago’s office market. Even in relatively good times, the vacancy rate can hover in the high-teens, and for several years, the rate has been well over 20%. A second quarter analysis recently released by the Chicago office of Studley, for example, found that “availability remains above 20% in all submarkets (except for O’Hare-19.6%) and leasing has been sluggish since the third quarter of last year.” Furthermore, “asking rents fell by 1.6% overall to $20.08 and class A rents dipped by 2.1% to $21.19 in the second quarter.”

“It’s remained a bloodbath; particularly in the northwest and in the class B space,” says Joe Learner, executive vice president and a branch manager of Studley’s Chicago office. “There is activity in many of the better class A buildings, but it’s not really absorption. It’s really just musical chairs” as companies move around in search of better deals. “Many times, they leave as much space as they’re taking.” Capital Financial Corp., for example, gave a solid boost to the northwest last summer when they leased roughly 150,000-square-feet at the Atrium Corporate Center in Rolling Meadows, but in doing so, left a big space in Elmhurst.