MBRE: CBD Direct Vacancy Hits 4-Year Low

CHICAGO—Landlords of the 30 newest class A office buildings in downtown Chicago saw the direct vacancy rates for their properties decline slightly over the last quarter from 10.0% to 9.9%, and the overall direct vacancy rate for the CBD sank by 20 bps, to 14.5%, according to data just published by MBRE. It marks the first time in four years that the direct vacancy rate went below the 2009 equivalent rate. “This indicates that the office market’s gradual improvement coincides with the recovering economy,” the researchers note. “The direct vacancy rate spread decreased slightly as well from September to December which indicates demand for class B and C buildings is catching up with the newest product.”

MBRE researchers say three new leases were signed in these 30 buildings, which were all built between 1989 and 2009 and range from 372,000-square-feet to 1,845,460-square-feet, since their last report in September. DHL International and Legal & General Investment Management America both signed leases at 71 S. Wacker for a total of about 38,500-square-feet, and PricewaterhouseCoopers signed a lease for 32,500-square-feet at 1 N. Wacker Dr. “These recent transactions,” they note, “have contributed to the slight drop in the direct vacancy levels tracked by the Index and are representative of the overall market recovery.”