Off-Loop Markets Stengthening, Studley Finds

CHICAGO—Tenants continue to flock toward the hot West Loop and Near North markets, according to a third quarter analysis recently released by the Chicago office of Studley, but demand in other submarkets in the CBD appears to have stagnated. Class A availability in the Near North sank 0.9% to 14.4% and declined 0.8% to 16.2% in the West Loop area. Overall availability in the CBD has been declining since the fourth quarter of 2010, Studley researchers note, but while the West Loop, East Loop and Near North submarkets have seen the amount of available class A space decline by 2.5-million-square-feet, the amount of similar space in the rest of the downtown, including the Michigan Ave., LaSalle St. and Central Loop submarkets, has increased by 700,000-square-feet.

Furthermore, asking rents in the Near North’s non-class A buildings, such as the older loft-style buildings common in the neighborhood and strongly-preferred by tech companies, have risen 19% in the last three years, but only 4.2% in the entire CBD.